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 AN ACT TO RATIFY THE CONCESSION AGREEMENT


AMONG THE GOVERNMENT OF THE


REPUBLIC OF LIBERIA, WESTERN CLUSTER LIMITED,


SESA GOA LIMITED, BLOOM FOUNTAIN LIMITED AND


ELENILTO MINERALS AND MINING LLC.














APPROVED: AUGUST 22,2011














PUBLISHED BY AUTHORITY


MINISTRY OF FOREIGN AFFAIRS


MONROVIA, LIBERIA

















AUGUST 22, 2011


MINERAL DEVELOPMENT AGREEMENT





Among


THE GOVERNMENT OF





THE REPUBLIC OF LIBERIA,


WESTERN CLUSTER LIMITED,


SESA GOA LIMITED,


BLOOM FOUNTAIN LIMITED


AND





ELENILTO MINERALS & MINING LLC








Dated as of August 3, 2011


AN ACT TO RATIFY THE CONCESSION AGREEMENT AMONG THE


GOVERNMENT OF THE REPUBLIC OF LIBERIA, WESTERN CLUSTER LIMITED.,


SESA GOA LIMITED, BLOOM FOUNTAIN LIMITED AND ELENILTO MINERALS


AND MINING LLC








It is enacted by the Senate and House of Representatives of the Republic of Liberia


in Legislature assembled:


SECTION I:


That from and immediately upon the passage of this Act, “AN ACT TO RATIFY


THE CONCESSION AGREEMENT AMONG THE GOVERNMENT OF THE


REPUBLIC OF LIBERIA, WESTERN CLUSTER LIMITED, SESA GOA LIMITED.


BLOOM FOUNTAIN LIMITED AND ELENILTO MINERALS AND MINING LLC” as


herein recited below word for word in the authentic English Version be, and the


same is hereby ratified.





SECTION II: SHORT TITLE:


This ACT TO RATIFY THE CONCESSION AGREEMENT AMONG THE GOVERNMENT


OF THE REPUBLIC OF LIBERIA, WESTERN CLUSTER LIMITED, SESA GOA LIMITED,


BLOOM FOUNTAIN LIMITED AND ELENILTO MINERALS AND MINING LLC shall


also be cited as the WESTERN CLUSTER CONCESSION AGREEMENT.


SECTION III:


That any and all obligations, covenants, terms and conditions as contained in the


above mentioned ACT TO RATIFY THE CONCESSION AGREEMENT AMONG THL


GOVERNMENT OF THE REPUBLIC OF LIBERIA, WESTERN CLUSTER LIMITED,


SESA GOA LIMITED, BLOOM FOUNTAIN LIMITED AND ELENILTO MINERALS


AND MINING LLC ALONG WITH ITS ADDENDUMACT TO RATIFY THE


CONCESSION AGREEMENT AMONG THE GOVERNMENT OF THE REPUBLIC OF


LIBERIA, WESTERN CLUSTER LIMITED, SESA GOA LIMITED, BLOOM


FOUNTAIN LIMITED AND ELENILTO MINERALS AND MINING LLC shall be


carried to full completion unless otherwise modified, amended or repealed.


SECTION IV:


This Act shall take effect immediately upon the publication into handbill.





ANY LAW TO THE CONTRARY NOTWITHSTANDING.


Tabic -,!t Contents





Section Page


SECTION I DEFINITIONS, TERMINOLOGY AND INTERPRETATION....................9


SECTION : EFFECTIVE DATE......................................................................................21


SECTION 3 TERM OF THE AGREEMENT...................................................................21


SECTION 4 EXPLORATION LICENSE; INTERIM EXPLORATION


RIGHTS: PICE-FEASIBILITY STUDY............................................................................21


4.1 Exploration Licenses..................................................................................21


4.2 Exploration Rights.....................................................................................22


4.3 Retained Production Areas........................................................................23


4.4 Termination of Exploration Rights and Lapse of Exploration


Area............................................................................................................23


4.5 Third Party Rights in the Exploration Area...............................................23


4.6 Pre-Feasibility Report................................................................................24


SECTION 5 MINING LICENSES....................................................................................24


5.1 Designation of Proposed Production Areas and Application for


a Mining License........................................................................................24


5.2 The Feasibility Report..............................................................................-.26


5.3 Extension Of The Due Dates For Filing Notices And Feasibility,......


Report........................................ -28


5.4 Postponement of Feasibility Report................................. 28


5.5 Mining License.........................................................................................30


5.6 Components of the Feasibility Report.......................................................31


5.7 The Environmental Impact Assessment Study Report and the


Environmental Management Plan..............................................................36


5.8 Social Impact Assessment and Social Action Plan....................................37


5.9 Approval of the Feasibility Report and Grant of Mining


License.......................................................................................................38


5.10 Term of Mining Licenses...........................................................................41


5.11 Additional Capital Investment or Material Changes in


Operations..................................................................................................43


SECTION 6 CONSTRUCTION AND OPERATIONS....................................................43


6.1 Capital Expenditures; Construction...........................................................43


6.2 Completion.................................................................................................45


6.3 Mining Term Operations............................................................................46


6.4 Recovery Shortfalls....................................................................................47


6.5 Increasing Liberia-Based Value-Added Production Capacity...................49


6.6 Concerning Road Construction and Renovations......................................50


6.7 Concerning Railroad and Port Construction and Operations.....................50


6.8 Company Reporting Requirements............................................................55


6.9 Books and Records....................................................................................57


6.10 Inspection........................................................ ..........................................57


6.11 Insurance....................................................................................................57








/


SECTiC.'v 7 L, yND AM) FACILITIES............................................................................58


7.1 Surface Rights............................................................................................58


7.2 Limitation on Exploration and Production................................................59


7.3 Acquisition of Land Use Rights Outside a Production Area.....................59


7.4 Costs of Acquisition of Land Use Rights; Termination of


Rights.......................................................................................................59


SECTION 8 COMMUNITY RESOURCES....................................................................60


8.1 Community Responsibility.......................................................................60


8.2 Community Funding Obligation................................................................60


SECTION 9 PUBLIC HEALTH AND SAFETY..............................................................61


9.1 Safety Procedures and Notifications..........................................................61


9.2 Security......................................................................................................61


9.3 Employee Housing.........;...........................................................................63


9.4 Sanitation............................................................ 63


9.5 Water Supply; Clean and Safe Drinking Water.........................................63


9.6 Size of Houses............................................................................................63


SECTION 10 MEDICAL CARE.......................................................................................63


SECTION 11 EMPLOYMENT, TRAINING AND EDUCATION..................................64


11.1 Employment...............................................................................................64


11.2 Training of Liberians.................................................................................65


11.3 General Education Funding.......................................................................66


11.4 Scientific Research Fund...........................................................................67


11.5 Audit Rights...............................................................................................67


SECTION 12 USE OF LIBERIAN GOODS AND SERVICES.......................................68


SECTION 13 ENVIRONMENTAL PROTECTION AND MANAGEMENT.................68


13.1 The Company’s Duty.................................................................................68


13.2 Environmental Reports and Audits............................................................68


13.3 Government Environmental Inspections....................................................69


13.4 Updating the EIA and the EM1Y................................................................69


13.5 Scope of Duty to Cease Operations during Remediation..........................70


13.6 No Liability for Previous Negative Environmental Impact.......................70


SECTION 14 TAXATION................................................................................................71


14.1 Law of General Applicability....................................................................71


14.2 Fiscal Regime.............................................................................................71


SECTION 15 ROYALTIES, DETERMINATION OF FAIR MARKET


VALUE, EXPORT SALES PRICE...................................................................................73


15.1 Royalties....................................................................................................73


15.2 Fair Market Value, the Sales Price; Computation of Gross


Income........................................................................................................74


35.3 The Pricing Agreement..............................................................................74


SECTION 16 OTHER PAYMENTS TO THE GOVERNMENT.....................................75


16.1 Processing and Delay Fees.........................................................................75





N ^


16.2 ECOWAS Trade Levy...............................................................................75


16.3 Inspection Fees...........................................................................................76


16.4 Regulatory Fees.........................................................................................76


16.5 Mineral Development and Research Fund.................................................76


16.6 Water Use Levy..................;......................................................................76


16.7 Up-Front Payments....................................................................................76


SECTION 17 FINANCIAL REPORTING AND CURRENCY.......................................76.


17.1 Accounting and Tax Matters......................................................................76


17.2 Exchange Control.......................................................................................77


17.3 Currency of Paymenls to the Government.................................................77


17.4 Financial Statements and Audit.................................................................77


17.5 Compliance with LEITI.............................................. 79


SECTION 18 INCIDENTAL RIGHTS AND OTHER MATTERS.................................79


18.1 Imports........................................................................ 79


18.2 Taxes on-Resale oflmported Items............................ 79


18.3 Right to Export Minerals and Other Rights................ 80


18.4 Dealership Licenses...................................................................................80


SECTION 19 ADDI TIONAL UNDERTAKINGS OF THE GOVERNMENT................80





19.1 Access to Information................................................................................80


19.2 Provision of Documents.............................................. 80


19.3 Electricity Generation and Transmission................ .....80


19.4 Communications Facilities, Systems and Frequencies..............................82


19.5 Rightto Water............................................................................................82


19.6 Peaceful Enjoyment...................................................................................82


19.7 Expropriation and Non-Discrimination.....................................................83


19.8 Use of Existing Public Utilities and Facilities; Integration with


Company Infrastructure.............................................................................83


19.9 Further Undertakings.................................................................................84


1^.10 Status of this Agreement............................................................................85


SECTION 20 OTHER UNDERTAKINGS OF THE COMPANY...................................85


20.1 Indemnification of the Government by the Company...............................85


20.2 Books and Records....................................................................................86


20.3 Subsidiaries; Investments...........................................................................86


20.4 Adequate Capital........................................................................................87


20.5 Provision ol'Funds and Technical Capability............................................88


20.6 Guarantees..................................................................................................89


20.7 Transactions with Related Persons............................................................90


20.8 The Company.............................................................................................90





SECTION 21 REPRESENTATIONS AND WARRANTIES...........................................91


21.1 Representations and Warranties of the Company......................................91


21.2 Representations and Warranties of the Government.................................92


21.3 Representations, Warranties, and Undertakings of the


Shareholders...............................................................................................93


SECTION 22 CONFIDENTIALITY.................................................................................95


22.1 The Agreement...........................................................................................95





I


v


 22.2 Other Information, 95





SECTION 23 ASSIGNMENTS, TRANSFERS AND CHANGES OF ,


CONTROI..........................................................................................................................96


, 23.1 General Transfer Rule................................................................................96


l- 23.2 Permitted Transfer to an Affiliate..............................................................97


23.3 Permitted Transfer to a Person not an Affiliate.........................................98


23.4 Genera! Change of Control Rule................................................................98


23.5 Permitted Changes of Control....................................................................99


23.6 Right to Encumber, and Related Transfers and Changes of


Control......................................................................................... 100


23.7 Reissue of Mining License in Name of Transferee; Mining


License Invalid unless Reissue Request Timely Received......................101


23.8 Permitted Transferee................................................................................101


23.9 Responsibility of Licensee.......................................................................102


23.10 Disclosure; Consents.;- Exceptions; Fees.......................................:..........102


23.11 Terms used in Section 23.........................................................................103


SECTION 24 SUSPENSION..........................................................................................103


24.1 Power of Minister to Suspend Work........................................................103


24.2 Order Suspending Work..........................................................................104


24.3 Compliance with Suspension Order.........................................................104


24.4 Resumption of Work................................................................................104


• 24.5 Suspension Order Incorrectly Given........................................................105


SECTION 25 EVENTS OF DEFAULT; TERMINATION............................................105


25.1 Government Events of Default................................................................105


25.2 Company Events of Default.....................................................................105


25.3 Disputed Payments...................................................................................106


25.4 Nature of Notice of Default.....................................................................107


25.5 Notice of Termination; Termination When a Mortgage Exists;


Arbitration of Disputes as to Existence of Event of Default...................107


25.6 Automatic Termination............................................................................108


25.7 Winding-up Commission.........................................................................109


SECTION 26 DISPOSITION OF ASSETS....................................................................110


26.1 General Provision.....................................................................................110


26.2 Disposition of Assets on Termination by the Government or


Expiration of the Term.............................................................................110


26.3 Special Provisions for Public Use Infrastructure.....................................113


26.4 Certain Insurance and Maintenance Obligations of the


Company..................................................................................................113


26.5 Determination of Movable Asset Fair Market Value..............................114


26.6 Disposition of Mining Plant and Infrastructure on Termination


by the Company.......................................................................................114


26.7 Miscellaneous..........................................................................................114


26.8 Liens........................................................................................................115


26.9 Intellectual Property.................................................................................115


SECTION 27 MEDIA TION; ARBITRATION...............................................................115


27.1 Mediation.................................................................................................115


27.2 Submission lo UNCITRAL Arbitration...................................................i 16


27.3 Scat of Arbitration....................................................................................116


27.4 Single Arbitrator............................................................................ 116


27.5 Single Claim; No Concurrent Proceedings..............................................117


27.6 Special Provisions...................................................................................117


27.7 Exclusive Remedy...................................................................................117


27.8 Severability..............................................................................................117


27.9 Shareholder Benefit and Appointment and Government


Acknowledgement...................................................................................117


SECTION 28 NOTICES..................................................................................................118





28.1 Written Communications.........................................................................118


28.2 Delivery....................................................................................................118


28.3 Addresses.................................................................................................119


28.4 Change of Address...................................................................................121


28.5 Quantities..................................................................................... 121.





SECTION 29 FORCE MAJEURK..................................................................................121


29.1 Application...............................................................................................121


29.2 Definition.................................................................................................122


29.3 No Required Settlement...........................................................................122


29.4 Termination As a Result of Force Majeure..............................................122


SECTION 30 GOVERNING LAW.................................................................................122


30.1... Applicability of Liberian Law....................................................... 122


30.2 Construction and Interpretation...............................................................122


SECTION 31 PERIODIC REVIEW................................................................................123





31.1 Profound Change in Circumstances.........................................................123


, 31.2 Other Consultation...................................................................................123


l


SECTION 32 WAIVER OH SOVEREIGN IMMUNITY...............................................123


SECTION 33 MISCELLANEOUS.................................................................................123





33.1 Where Payments to Government are Made.............................................123


33.2 Entire Agreement.....................................................................................124


33.3 Amendment and Interpretations...............................................................124


33.4 Limitation of Liability..............................................................................124


33.5 Non-Waiver of Rights..............................................................................124


33.6 Third Party Beneficiary............................................................................125


33.7 Assignment and Succession.....................................................................125


33.8 Survival....................................................................................................125


33.9 Severability..............................................................................................125


33.10 Publication...............................................................................................125


33.11 Counterparts.............................................................................................126


























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 I











SCHEDULES AND EXHIBITS








Schedule 1 Description of Exploration Area


Schedule 2 Description of Pre-Feasibility Study Activities


Schedule 3 - Shareholders, Affiliates and Related Matters





Exhibit 1A


Form of Mining License


Exhibit IB Form of Mineral Exploration License


Exhibit 2A Parent Guarantee





Exhibit 2B Form of Exploration Guarantee


Exhibit 2C Form of Mining Guarantee


Exhibit 3 - Other Approved Fiscal Provisions


Exhibit 4 - The Pricing Agreement (To be attached after Effective Date


pursuant to Section 15.3(c))


Exhibit 5 [RESERVED]


Exhibit 6 Principles Relating to Community' Funding


Exhibit 7 Intermediate Inputs and Consumables


Exhibits - Form of Deed of Adherence


Exhibit 9 Port Lease (including map of leased area in Port) (To be


provided after Effective Date when Port Lease is negotiated


Exhibit 10A - and executed. See Section 6.7(j)


Map of Railroad Corridor to Monrovia Port


Exhibit iOB - Map of Road Corridor to Monrovia Port (To be be prepared


by the MOPW and attached to this Agreement as an exhibit


when it has been approved by the MOPW pursuant to


Section 6.7(b)) '


Exhibit 11A - Form of Escrow Release Notice


Exhibit I IB Form of Document Release Notice






































l


 :kAL DEVELOPMENT AGREEMENT





This Mint Agreement (as hereinafter defined, the “Agreement”') is made


the 3rd of, and among:





iRNMENT OF THE REPUBLIC OF LIBERIA





represented of Lands, Mines and Energy, the Minister of Finance, and the


Chairmanj Investment Commission, and attested to by the Minister of


Justice,





WESTERN CLUSTER LIMITED








a corporate under the laws of Liberia (as hereinafter defined, the


“Company’’





SESA GOA LIMITED


a publicly li,incorporated under the laws of India (“Scsa Goa”).





BLOOM FOUNTAIN LIMITED


a corporatiorider the laws of Mauritius (as hereinafter defined, “Bloom’”).





and





INILTO MINERALS & MINING LLC,


a limited liaby organized under the laws of Delaware (as hereinafter defined,


“Eicniito”).


Capitalized tq this Agreement without other definition have the respective


meanings assia in Section 1.


WITNESSET.


A. Every Njie surface of the ground or in the soil or sub-soil, rivers, water


courses, waters and continental shelf of Liberia is the property and


national Liberia and all rights related to the exploration for and


expioit^erals belong exclusively to Liberia.


B. The Goifesircs to encourage the further exploration and development of


Minerals, and wishes to promote and facilitate the operation of mining


eompanifcction therewith.


C. The Go'ilso desires, through the operation of mining companies, to


benefit n which Minerals are developed, including facilitating growth


centers tttion tor sustainable regional development, to create more


cmploynnunities, to encourage and develop local business and ensure


that skilbow and technology are transferred to citizens of Liberia, to


acquire basic data regarding and related to the country's Mineral resources and to


preserve and rehabilitate the natural environment for further development of


Liberia.


D. On November, 28lh 2008, the Government issued a genera! solicitation for bid


proposals for the exploration and mining of iron ore in the “Western Cluster Iron


Ore Deposits” of Liberia, (“Western Cluster Project”) as described in Tender


Documents dated December 15, 2008.


E. On May 15th 2009, Elenifto Minerals & Mining Ltd, a company registered under


the laws of Anguilla (“Elenilto Anguilla”), submitted a bid in response to the


Western Cluster Invitation to Bid as set forth in the Bid Proposal of May 15, 2009


and subsequently in the Clarifications to bid proposals submitted on November


30,2009;


F. In December 2009. the Government notified Elenilto Minerals & Mining Ltd that


its bid had been accepted by (he Government and that Elenilto Minerals &*Mining


Ltd was determined to be the “Provisional Winner” of the Tender for the


Rehabilitation and Development of the Western Cluster Iron Ore Project;


G. In order to cany' out the Western Cluster Iron Ore Project, Elenilto Minerals &


Mining Ltd formed Western Cluster Limited, a Liberian corporation, as a wholly


owned subsidiary;


H. Subsequently, Scsa Goa sought to acquire, directly or indirectly, a majority


interest in the issued and outstanding share capital of the Company from Elenilto


Minerals & Mining Ltd, and the Government approved the acquisition of such


interest by Sesa Goa (or its wholly owned subsidiary);


l. On June 7, 2011, Elenilto Anguilla filed a certificate of conversion with the


Secretary of State of the Stale of Delaware converting from an Anguillan


company to a Delaware limited liability company undej the name “Elenilto


Minerals & Mining LLC”;


J. On July 25, 2011, Elenilto, Sesa Goa, the Company, and Bloom Fountain Limited,


a company formed under the laws of Mauritius (“Bloom”) and a wholly-owned


subsidiary of Sesa Goa, have entered into a Share Purchase and Operation


Agreement pursuant to which Bloom has acquired title to 51% of the outstanding


shares of capital stock of the Company and has agreed to have control over the


management and operations of the business of the Company and the Project;


K. . In compliance with the laws of Liberia, Elenilto shall pay all applicable taxes,


including withholding tax as provided herein, on the proceeds received in


connection with the acquisition by Bloom of a majority interest in the issued and


outstanding share capital of the Company, and Bloom shall withhold from its


payment to Elenilto, and remit to the Government, the amount of withholding tax


required by this Agreement;


L. Elenilto, Bloom, and Sesa Goa, as the shareholders or parent thereof, of the


Company, shall be jointly and severally liable for all obligations of the Company;








•~N


M. Vtiiii the oojootivo oi the invitation to bid and the lender Documents


published by the Government in December of 2008, the Government, Elenilto,


Sesa Goa, Bloom, and the Company have entered into this Agreement for the


purpose of confirming the terms and conditions under which the Government is


willing to grant the Company Exploration Licenses for the Bomi Hills, Bea


Mountain and Mano River iron ore deposits and confirming the terms and


conditions that will govern the Company’s transition to Class A Mining Licenses


covering the Bomi Hills, Bea Mountain and Mano River iron ore deposits and its


operations under such Class A mining licenses.


N. The Government is willing to grant the Company’s rights with respect to Mineral


exploration and mining in connection with the referenced deposits on the terms


and conditions set forth herein, and the Company is willing to accept such rights


on the terms and conditions set forth herein.


MOW, THEREFORE, the parties hereby agree as follows:


SECTION 1 DEFINITIONS, TERMINOLOGY AND INTERPRETATION


The following terms wherever used in this Agreement shall have the respective meanings


set forth below':


“Acceptable Third Party Financial Institution’’ means a third party financial institution


with a long-term credit rating of at least A (or its equivalent) front at least two


internationally recognized credit-rating agencies.


“Affiliate” of any Person means any other Person that, directly or indirectly, Controls or


is Controlled by or is under common Control with, such Person.


“Afireed Revenue Code” has the meaning given in Section 14.2(a).


“Agreement” means this Mineral Development Agreement as well as all schedules and


exhibits annexed to it, as they may from time to time be amended.


“Annual Social Contribution” has the meaning given in Section 8.2(a).


“APMT” has the meaning given in Section 6.7(d).


“Big Four Firm” has the meaning given in Section 20.7.


“Bloom” has the meaning given in the preamble to this Agreement.


“Business Day” means any day other than a Saturday or Sunday or a holiday declared by


the Government.


“Chairperson of the Winding Up Commission” means the person designated as the


Chairperson of the Winding Up Commission in accordance with Section 25.7(a).


“Chairperson of the National Investment Commission” means the Chairperson of the


National Investment Commission of the Republic of Liberia.





/


 “Change of Control' means any assignment, sate, or transfer of interest of any type which


results in a change in possession of the power to Control the Company, whether such


power is vested in a single Person or a Group. A Change of Control of a shareholder


(including any Shareholder), member, partner or joint venturer of the Company or of a


Group made up of such Persons will constitute a Change of Control of the Company if


such shareholder, member, partner, joint venturer or Group can Control the Company.


“C1M Code” has the meaning given in the definition of Selected CRIRSCO Code.





“Commission” has the meaning given in Section 25.7(a).





“Committee” has the meaning given in Section 8.2(c).


“Communication” has (he meaning given in Section 28.1.





“Company” has the meaning given in the preamble to this Agreement.


“Company Event of Default” has the meaning given in Section 25.2.





“Competent Person” has the meaning assigned in the Selected CRIRSCO Code, provided


that for three years from the Effective Date the term “Competent Person” shall also


include a geologist who is a citizen and resident of Liberia with a graduate degree in


mineral geology from an internationally recognized geology program who lacks the


professional membership requirements imposed for qualification as a Competent Person


under the Selected CRIRSCO Code but who otherwise has a minimum.af five years post¬


graduate experience in non-governmental employment relevant to the style of


mineralization and type of deposit or class of deposit under consideration and to the


activity which that person is undertaking, provided that (a) if such person is estimating or


supervising the estimation of Mineral Resources, the relevant experience shall be in the


estimation, assessment and evaluation of Mineral Resources, (b) if such person is


estimating, or supervising the estimation of Mineral Reserves, the relevant experience


shall be in the estimation, assessment, evaluation and assessment of the economic


extraction of Mineral Reserves, and (c) such person has certified to the Minister that he


has the requisite professional competence in the commodity, type of deposit and situation


under consideration.


“Confidential Information” has the meaning given in Section 22.2(a).





“Control” (including the terms “Controlled by” and “under common Control with” and


“Controls”) means the possession, directly or indirectly, of the power to direct or cause


the direction of (or to block action by) the management of a Person. Without limiting the


generality of the preceding sentence, the ability to control a Person is presumed to exist if


a second Person or Group holds or can direct the exercise of at least 25% of the


Management Rights with respect to such first Person and no third Person or Group holds


or can direct the exercise of a percentage of the Management Rights with respect to such


first Person that exceeds the percentage of the Management Rights held by such second


Person or Group.


“Controlling Person” has the meaning given in Section 23.11.








i 17


I


\


\


“Deflator" means the GDP Implicit Price Deflator as published and revised from time to


time by the U.S. Department of Commerce Bureau of Economic Analysis. If such index


is no longer published, the parties shall agree upon a functionally and substantively


similar replacement reference or otherwise agree upon adjustments that will substantially


preserve the economic impact and timing of the periodic adjustments contemplated by


Sections 8.2(b), 11.3(b) and 11.4,


“Development" means all preparation for the removal and recovery of Minerals,


including the construction and installation of all Mining Plant, Infrastructure and other


equipment to he used in connection with the mining, handling, milling, beneficiation or


other processing or transportation of Minerals.


“Development Plan” has the meaning given in Section 5.6(a)(iv).


“Disapproval Notice" has the meaning given in Section 5.9(e).


“Disapproved Feasibility Report” has the meaning given in Section 5.9(e).


“Dispute" has the meaning given in Section 27.1(a).


“Dollar” and “USS" means the lawful currency of the United States of America.


“ECOWAS” means the Economic Community of West African States.


“Effective Date” has the meaning given in Section 2.


“EIA” has the meaning given in Section 5.6(b).


“Elenilto” has the meaning given in the preamble to this Agreement.


“BMP” has the meaning given in Section 5.6(b),


“Environmental Restoration Obligations” has the meaning given in Section 5.7(c).^


“Environmental Restoration Obligations Funding Agreement” has the meaning given in


Section 5.7(c).


“Environmental Restoration Obligations Guarantee” has the meaning given in Section


5.7(c).


“EPA” means the Environmental Protection Agency of Liberia and any other ministry,


department or agency of Liberia that succeeds to its environmental protection functions.


“Event of Default” means a Government Event of Default or a Company Event of


Default.


“Exploration” and “Explore” have the respective meanings assigned in the Exploration


Regulations.


“Exploration Area” means each of the areas described in Schedule 1 to this Agreement as


such area may be modiflcJ by Section 3.2 of the Exploration Regulations.


“Exploration Guarantee” has the meaning given in Section 20.6(c).


“Exploration Guarantor’ has the meaning given in Section 20.6(c).





“Exploration Guarantor Net Worth Requirements” has the meaning given in Section


20.6(c).


“Exploration License” means the “License” for purposes of the Exploration Regulations,


issued to Company with respect to the Exploration Area.


“Exploration Period” means the term of an Exploration License issued pursuant to this


Agreement, including as modified or extended from time to time,


“Exploration Period Project Linkages Plan” has the meaning given in Section 4.2(e).


“Exploration Regulations” means the Regulation Governing Exploration Under a Mineral


Exploration License of the Republic of Liberia which became effective on and after


March 2010., as from time to time amended, supplemented or modified.


“Feasibility Consultant” has the meaning given in Section 5.2(a)(i).


“Feasibility Report” has the meaning given in Section 5.2(a)(i).


“Final Closure Plan” has the meaning given in Section 26.2(1).


“Financial Year” means January 1 through December 31, or such other period of twelve


calendar months ending on March 31, June 30.or October 31 as may be agreed.by the


parties.


“Force Maieure” has the meaning given in Section 29.2.


“Freeport Concession Agreement” has the meaning given in Section 6.7(d).


“Freeport of Monrovia” means the area located at latitude of 6°20’31 ” North and longitude


of K)f47’45” West on the coast of Liberia.


“GAAP” has the meaning given in Section 17.4(a).


“Government” means the Government of Liberia, including all of the branches, divisions,


instrumentalities and agencies of its government.


“Government Event of Default” has the meaning given in Section 25.1.


“Group” means two or more Persons who are acting together for the purpose of acquiring,


holding, voting or disposing of Management Rights of a Person. The parties to a


shareholders agreement with respect to a corporation that establishes how directors of the


corporation arc to be chosen or how the parties must vote their shares in certain cases, and


tHe parties to any similar agreement with respect to any other business entity, are in each


case members of a Group.


“Guarantor” means either the Exploration Guarantor or the Mining Guarantor, as


applicable.


“Guarai-u r .vet Won-i Requirements” means either the Exploration Guarantor Net Worth


Requirements or the Mining Guarantor Net Worth Requirements, as applicable.


'‘IFRS”has the meaning given in Section 17.4(a).


“Immovable” means, when referring to tangible property, all improvements to the Land,


such as roads, dams, and canals, and all items of tangible property that are securely


affixed and attached to the Land or to buildings or other structures on the Land. All Other


items of tangible property are “Movable”.


“Indebtedness” lias the meaning given in Section 20.4(c).


“Indicated Mineral Resource” has the meaning given in and is to be determined as


prescribed in the Selected CRiRSCO Code.


“Inferred Mineral Resource” has the meaning given in and is to be determined as


prescribed in the Selected CRIRSCO Code.


“Infrastructure” includes all facilities and, to the extent provided below, equipment,


constructed or acquired by purchase, lease or otherwise by the Company (other than


Mining Plant) and used by the Company in connection with Operations (other than in


Exploration), including (by way of example):


(a) Immovable transportation and communication facilities (including roads,


bridges, railroads, airports, landing strips and landing pads for aircraft,-


hangars and other airport facilities, garages, channels, tramways, pipelines


and Immovable installations for radio, telephone, telegraph,


telecommunications, and electronic or other forms of communications).


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


breakwaters, terminal facilities and warehouses, and loading and unloading


facilities).


/


(c) Immovable power, water 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, clinics and public


halls).


(e) Miscellaneous Immovable facilities used primarily in connection with the


operation of any of the foregoing (including offices, machine shops,


foundries, repair shops, employees’ housing and warehouses).


(0 Movable equipment used as an integral part of the Immovable facilities


described above.


“International Minina Standards” means such practices, methods and acts as are in


accordance with good standards of skill, diligence, judgment, prudence and foresight


practiced by prudent professionals employed by leading international firms in the


international mining industry (for example, firms that are members of the International


Council on Minerals and Metals), provided that the Government may by Law designate a


particular uiiernaiionai Mining Standard as being generally applicable to all holders of


Class A mining licenses or exploration licenses issued under the Mining Law.


"Investor Parties” has the meaning given in Section 27.1(a).


“Iron Ore” means Minerals of which the principal economic value is its iron content.


“JORC Code” has the meaning given in the definition of Selected CRIRSCO Code.


“Land” means any land in Liberia including any creeks, streams, rivers or bodies of water


(and their residue) contained on or within all such land.


"Landowner” has the meaning given in the Mining Law.


“Law” means any constitution, treaty obligation, law, statute, decree, rule, regulation,


judicial act or decision, judgment, order, proclamation, directive, executive order or other


sovereign act of the Government other than this Agreement.


“LCIA” means the London Court oflnternational Arbitration.


“Legislature” has the meaning given in Section 2.


“Liberian Currency” means any currency, except Dollars, that is legal tender in Liberia,


01 circulates freely in any part of Liberia by virtue of any Law or authority as a medium


of exchange for the purchase or sale of goods and services.


“Lien” means any mortgage, lien, pledge, charge, security interest or other encumbrance


on any property or asset, or any interest or title of any vendor, lessor, lender or other


secured party in or to any property or asset under any conditional sale or other title


retention agreement.


“Major Contractor” has the meaning given in Section 12.


"Management Rights” means, with respect to a Person, the right to participate in the


direction of the management and policies of such Person, through such means (by way of


example and not limitation) as (i) the power to direct the vote of shares entitled to


participate in the election of directors of such Person, (ii) any other right to participate in


the designation of the directors of such Person, (Hi) the power to act as, or to direct the


vote of a voting partner of, any such Person that is a partnership, or (iv) the contractual


right to act as a manager or operator of any such Person that is a limited liability company


or similar entity, or to participate in the direction of such manager or operator.


“Material Adverse .Effect” means any material adverse effect on (i) Operations or (ii) the


ability of the Company to exercise its rights or perform its respective obligations under


this Agreement, any Exploration License or any Mining License.


“Mine” when used as a verb, means to intentionally extract or win Minerals and includes


any Operations directly or indirectly incidental thereto. “Mining”, when used as a verb,


has a corresponding meaning. “Mine”, when used as a noun, refers to the tangible shafts,


cuttings, excavations and diggings from which or through which Minerals are extracted


from the earth.





\


V


“Mineral” or “Minerals” means a naturally occurring element or compound having an


orderly internal structure and characteristic chemical composition, crystal form, and


physical properties, formed by or subject to a geological process but not including


hydrocarbons.


“Mineral Development Fund” means the Mineral Development Fund established by the


Mining Law.


“Mineral Reserves” has the meaning given in, and is to be determined as prescribed in,





the Selected CRIRSCO Code.


“Mineral Resources” has the meaning given in, and is to be determined as prescribed in,





the Selected CRIRSCO Code.


“Mining Guarantee” has the meaning given in Section 20.6(d).


“Mining Guarantor” has the meaning given in Section 20.6(d).


“Mining Guarantor Net Worth Requirements” has the meaning given in Section 20.6(d).





“Mining Law" means the Minerals and Mining Law 2000 Part I of Title 23 of the


Liberian Code of Law Revised, as from time to time amended, supplemented or modified.


“Mining License” means a Class A mining license granted by the Government to the


Company under the Mining Law and Section 5 of this Agreement to Mine and produce


specific Minerals in a specified area in Liberia, which sKall'be substantially in the form of


Exhibit 1 hereto or as the parties may-otherwise agree.


“Mining Plant” means all facilities and equipment constructed or acquired by purchase,


lease or otherwise by the Company that are directly used in the extraction, milling,


beneficialion or other processing of Minerals into the form in which they are marketed by


the Company, including both Immovable items and Movable items. For the avoidance of


doubt, facilities and equipment used to transport Minerals after extraction and through the


final stage of processing by the Company (including direct Mineral load-out facilities


integrated into the final processing facility and transport from the final processing facility


to adjacent storage areas) constitute Mining Plant, while such things as facilities and


equipment used to load and transport Minerals onward from the point of final processing


constitute Infrastructure.


“Mining Term” has the meaning given in Section 5.10(a).





“Minister” has the meaning given in the Mining Law.


“Minister of Finance" means the Minister of Finance of the Republic of Liberia.


“Minister of Justice” means the Minister of Justice of the Republic of Liberia.





“Ministry" means the Ministry of Lands, Mines and Energy of Liberia and any other


ministry, department or agency of Liberia that succeeds to its responsibilities of


supervising the undertaking of Mineral exploration and mining activities in Liberia.


“Ministry of Finance" means the Ministry of Finance of the Republic of Liberia.





r


 “Ministry of Justice” means the Ministry of Justice of the Republic of Liberia.





“Ministry of Public Works’’ means the Ministry of Public Works of the Republic of


Liberia.


“Mortgage” has the meaning given in Section 23.6.


“Mortgaged Property” has the meaning given in Section 23.6.


“Movable" has the meaning given in the definition of “Immovable” above.


“National Investment Commission” means the National Investment Commission of the


Republic of Liberia.


“Net Worth” means, as to any corporate Person, at any relevant lime:


(a) the total assets of such Person which would be shown as assets on a


balance sheet of such Person as of such time prepared in accordance with


GAAP or IFRS, as applicable; minus


(b) the total liabilities of such Person which would be shown as liabilities on a


balance sheet of such Person as of such time prepared in accordance with


GAAP or IFRS, as applicable.


“Occupant'of Land" has the meaning given in the Mining Law.


“Official” has the meaning given in Section 21.1 (i).


“Operations" means all activities and transactions conducted by or on behalf of the


Company with respect to, under or incidental to this Agreement including Exploration,


Development, Production and restoration or remediation.


“Operations Plan” has the meaning given in Section 5.6(a)(v).


“parent Guarantee” has the meaning given in Section 20.6(b).


“Parent Guarantor” has the meaning given in Section 20.6(b).


“Parent Guarantor Net Worth Requirements" has the meaning given in Section 20.6(b).


“party” means either the Government or the Company or, solely for the purposes of


Sections 21.3, 27 and 28.3, any Shareholder or Sesa Goa, and, in the plural form, both the


Government and the Company and, solely for the purposes of Sections 21.3, 27 and 28.3,


any Shareholder or Sesa Goa.


“Payment Notice” has the meaning given in Section 25.3.


“Permitted Subsidiaries” means the Company’s wholly-owned Liberian Subsidiaries


working exclusively with the Company in relation solely to the Operations.


“Permitted Transferee” has the meaning given in Section 23.8.








V


“Person means a,.y natural person and any partnership, joint venture, corporation,


limited liability company, trust, estate or other organization or entity, and any branch,


division, political sub-division, instrumentality, authority or agency of any government or


state.


“Port” means the NIOC and LMC Iron Ore piers in the Freeport of Monrovia, Liberia and


the other integrated infrastructure marked on the map included in Exhibit 9 hereto.


“Port Lease” means a lease agreement to be entered into between the Company and the


National Ports Authority on mutually acceptable terms relating to land for use by the


Company in connection with the Company’s Iron Ore Operations that require use of


facilities at the Port. The Port Lease shall include a detailed map relating to the portions


of the Port where the Company is permitted to conduct Iron Ore Operations, which map,


at such time as the Port Lease is attached to this Agreement, shall be deemed to be


Exhibit 9 hereto.


“Power Plant” has the meaning given in clause (7) of Section 5.6(a)(iv).


“Pre-Feasibility Report” has the meaning given in Section 4.6.


“Prevailing Market Rate of Exchange” means the predominant rate, expressed in Dollars,


at which willing sellers and willing buyers, acting at arms-length and in the ordinary


course of business, are, on the day that the transaction takes place (or, if that day is not a


business day, the preceding business day), prepared to purchase or sell (as appropriate for


the applicable transaction) any currency issued by authority of the Central Bank of


Liberia or any successor governmental agency of Liberia or any relevant currency of


another jurisdiction (as the case may be) in London, United Kingdom and “business day"


for purposes of this definition means a day on which banks are open for normal banking


business in London, United Kingdom.


“Previous Negative Environmental Impact’'’ has the meaning given in Section 13.6(a).


“Pricing Agreement” has the meaning given in Section 15.3(a).


“Probable Mineral Reserve” has the meaning. given in and is to be determined as


prescribed in the Selected CRIRSCO Code.


“ProducUsV’ means any product or products produced by the Company under the


authority of a Mining License, be it ore, mill concentrates, pellets or any other product the


principal economic value of which is its iron content.


“Production'’ means the commercial exploitation of Minerals found in the Exploration


Area and authorized to be exploited under a Mining f.icense and all other activities


incidental thereto including the design, construction, installation, fabrication, operation,


maintenance and repair of Mining Plant, Infrastructure and any other equipment, and the


Mining, processing, stockpiling, transportation, export and sale of such Minerals.


“Production Area” means any of the areas in the Exploration Area designated by the


Company as a “Proposed Production Area” pursuant to Section 5.1 for which the


Government has granted a Mining License to the Company pursuant to Section 5.5,


including, for the avoidance of doubt, Retained Production Areas.-


“Production Operating Period’’ means the period of time during which the Mining Plant is


being operated, maintained and repaired and the Mining, processing, stockpiling,


transportation, export and sale of Minerals is occurring.


“Profound Changes in Circumstances” means such changes, since the relevant base


period under Section 31.1, in the economic conditions of the mineral and mining industry


worldwide or in Liberia, or such changes in the economic, political o* social


circumstances existing in Liberia specifically or elsewhere in the world at large as to


result in such a material and fundamental alteration of the conditions, assumptions and


bases relied upon by the parties at such base period that the overall balance of equities


and benefits reasonably anticipated by them will no longer as a practical matter be


achievable.


“Project” means the Mine, Mining Plant and Infrastructure relating to a Production Area


or a Proposed Production Area (as applicable).


“Prohibited Person" has the meaning given in Section 23.8.





“Property List” has the meaning given in Section 26.2(a).


“Proposed Production Area” means an area or area designated as such by the Company


pursuant to and in accordance with the requirements of Section 5.1.


“Proven Mineral Reserve” has the meaning given in and is to be determined as prescribed





in the Selected CRIRSCO Code.


“Railroad” has the meaning given in Section 6.7(a).


“RAP” has the meaning specified in Section 5.8(b),





“Regulations” means the regulations at the time in effect issued by the Minister pursuant


to Chapter 21 of the Mining Law.


/


“Related Person” has the meaning set forth in Section 208 of the Revenue Code.





“Relinquished Area” has the meaning given in Section 4.4.





“Restricted Payment” has the meaning given in Section 20.4(d).


“Retained Production Areas” has the meaning given in Section 4,3.


“Revenue Code” means the Revenue Code of Liberia 2000 of Liberia, as from time to


time amended, supplemented or modified, or any successor revenue code of Liberia.


References in this Agreement to the Revenue Code shall be deemed to include the


modifications set forth in Exhibit 3, as ifsuch modifications were in force and constituted


applicable Law for the purpose of determining the liabilities of the Company under the


Revenue Code.


“Review Period” has the meaning given in Section 5.9(a).


“Road” has the meaning given in Section 6.6.








/


1.


l“RoyaUv” Was the meaning given in Section 15.1(a).


“Royalty Rate" has the meaning given in Section 15.1(a).


“S AMR EC Code” has the meaning given in the definition of Selected CR1RSCO Code.





“SAP" has the meaning given in Section 5.6(c).


“Selected CRIRSCO Code" means a Committee for Mineral Reserves International


Reporting Standards (CRIRSCO) recognized mineral evaluation code such as the Joint


Ore Reserves Committee of the Australasian Institute of Mining and Metallurgy,


Australian Institute of Geoscientists and Minerals Council of Africa Coded for Reporting


of Exploration Results, Mineral Resources and Ore Reserves, as in effect from time to


time (the “JORC Code”), the Canadian Institute of Mining, Metallurgy and Petroleum


Definition Standards on Mineral Resources or Mineral Reserves, as in effect from time to


time (the “CIM Code”), or the South African Mineral Resource Code for the Reporting of


Exploration Results, Mineral Resources and Mineral Reserves, as in effect from time to


time (the “SAMREC Code”), as elected by the Company from time to time. Initially, the


Selected CRIRSCO Code is the SAMREC Code. If the Selected CRIRSCO Code is no


longer in effect or no longer defines a term defined herein by reference to it, the Company


will select a CRIRSCO-compIianl replacement code or if none exists a functionally and


substantively similar replacement code and promptly notify the Government thereof.





“Sesa Goa” has the meaning given in the preamble to this Agreement.


“Shareholders)” means Elcnilto, Bloom, and any other Person that acquires an interest


in the Company in accordance with this'Agreement.


“SIA” has the meaning given in Section 5.6(c).





“Start of Commercial Production” has the meaning given to the commencement of


“commercial production’’ in Section 700 (e) of the Revenue Code.


“Subsidiary” means, as to any Person, any other Person in which such first Person or one





or more of its Subsidiaries or such fust Person and one or more of its Subsidiaries owns


sufficient equity or voting interests to enable it or them (as a group) ordinarily, in the


absence of contingencies, to elect a majority of the directors (or Persons performing


similar functions) of such second Person, and any partnership or joint venture if more


than a 50% interest in the profits or capital thereof is owned by such first Person and/or


one or more of its Subsidiaries.


“Taxes and Duties” means any and all direct and indirect income, profit, excess profit,


additional profit, gains, capital gains, corporation, dividend, interest, financing, net worth,


sales, transaction, payroll, import, export, customs, consul, inspection, value added,


consumption, supply, use, turnover, severance, stumpage, cash flow, rental, land rental,


surface rental, property, stamp, withholding and other taxes, duties, fees, levies, excises,


rates, charges, imposts, surcharges, royalties and other Government imposed revenue


payments of whatever nature and however called and whether paid to the Government or


to any other Person at its directive or pursuant to Law.











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‘'Term” means the term of this Agreement set forth in Section 3, as it may from time to


time be extended in accordance with the provisions of this Agreement.


“Termination Notice” has the meaning given in Section 25.5(a).


“Third Party Company Claim” has the meaning given in Section 13.6(b)(i).


“Third Party Government Claim” has the meaning given in Section 20.1(a)(i).


“Transfer” means and includes a sale, assignment, pledge or other transfer of property, by


operation of law or otherwise.


"Transfer Pricing Study” has the meaning given in Section 20.7.


“LTNCITRAL Rules” means the arbitration rules of United Nations Commission on


International Trade Law.


'•Up-Front Payment” has (he meaning given in Section 16.7.


“Up-Front Payment Guarantee” means the certain guarantee of the Company’s payment


of the Up-Front Payment, dated as of the 25,h of July 2011 and issued by the Standard


Chartered Bank in favor of the Government.


“Work” means all activities undertaken by or on behalf of the Company under this


Agreement, including continuing Exploration under its Exploration License, if any, the


design and construction of all Mines, Mining Plant and Infrastructure and the acquisition


of related equipment, the operation of all Mines, Mining Plant, Infrastructure and related


equipment, the shutdown and demobilization of all Mines, Mining Plant and


Infrastructure, all environmental protection, restoration and remediation activities


required by this Agreement or by the EPA, and any other activities required to be


undertaken by the Company pursuant to this Agreement.


This Agreement shall be read with such changes in gender or number as the context shall


require. Headings to the clauses and sections of this Agreement are inserted for


convenience only and shall not affect its construction. Unless otherwise specifically


provided for in this Agreement, all references in this Agreement to Law or to any specific


laws or regulations of Liberia, including a specific section thereof, shall mean such laws,


regulations and/or section, including any successor law, regulation and/or section to any


law, regulation and/or section specifically cited in this Agreement as are at the time in


effect. All references in this Agreement to Law shall include, with respect to any statute,


any regulations promulgated thereunder. References to “Sections,” “Appendices,”


“Schedules” and “Exhibits” without other attribution are references to Sections,


Appendices, Schedules and Exhibits forming part of this Agreement.


Any reference to a Person includes such Person’s successors by operation of law and any


reference to a party also includes such party’s permitted assigns or any transferee


pursuant to Section 23.


Unless otherwise staled, a reference to “hereof,” “hereunder,” “herein,” or words of


similar meaning, means this Agreement. The words “and” and “or” will include the


conjunctive and disjunctive, as the context may require or permit. The word “include”


(and any variation of that word), without other qualification, means “including but not


limited io " Tin., Government, the Company and Elenilto have jointly participated in the


negotiation and drafting of this Agreement and it shall not be construed against any party


as the drafting party.


SECTION 2 EFFECTIVE DATE


2.1 Effective Date.


This Agreement, after having first been signed on behalf of the parties as provided on the


signature pages of this Agreement, shall become effective and be binding on them on the


date (the ''Effective Date’7-) on which the last of the following conditions have been


satisfied: (i) attestation of this Agreement by the Minister of Justice, (H) approval of this


Agreement by the President of the Republic of Liberia, (iii) ratification of this Agreement


by the National Legislature of the Republic of Liberia (the •‘Legislature’’’), and (iv)


publication of this Agreement in handbills (at which point this Agreement shall take


effect as Law). The Ministry and the Ministry of Finance shall provide the Company with


a certificate signed by representatives of the Ministry of Finance- and the Ministry


certifying that the events described in clauses (i) through (iv) of the foregoing sentence


have occurred.


2.2 Acquisition of Shares.


According to the terms of the Stock Purchaser and Operation Agreement executed


between Sesa Goa, Elenilto, Bloom and the Company, Bloom has acquired legal and


beneficial ownership of 51% of the outstanding shares of capital stock of the Company


and simultaneously therewith, Bloom has transferred an amount of $90,000,000 (Ninety


Million United States Dollars only) to an escrow account opened with JP Morgan,


London Branch according to the terms of a cash escrow agreement executed between


Bloom, Elenilto and JP Morgan. In parallel. Bloom and Elenilto have also executed a


document escrow agreement under which, Bloom and Elenilto have deposited certain


documents, including the Up-Front Payment Guarantee that was deposited by Bloom.


Immediately and in any event within 2 (two) days after ratification and prior to the


Effective Dale, the Government shall, through the Minister of Justice, issue the valid


release notices under the above two escrow agreements. Forms of the valid release notices


are attached hereto as Exhibits 11A and 1 IB,


SECTION 3 TERM OF THE AGREEMENT


The term of this Agreement commences on the Effective Date. The initial term of this


Agreement is 25 years, subject to earlier termination as provided in this Agreement, and


will be automatically extended to match any extension under Section 5.10(a) of the term


of any Mining License.


SECTION 4 EXPLORATION LICENSE; INTERIM EXPLORATION


RIGHTS; PRE-FEASIBILITY STUDY


4.1 Exploration Licenses.





Not later than ninety (90) days after the Effective Date, the Company shall be


granted Exploration Licenses for each of the Exploration Areas (as specified


herein or in accordance with the Exploration Regulations). 'I he terms of the


respective Exploration Licenses (the “Exploration Period” under the Exploration


Regulations) shall terminate as scheduled below,





(a) The Exploration License for the Bomi Deposit shall terminate on the


third (3/H) anniversary of the Effective Date.


(b) The Exploration License for the Mano River Deposit shall terminate on


the fifth (5th) anniversary' of the Effective Date; and


(c) The Exploration License for the Bea Mountain Deposit shall terminate


on the seventh (7,?!) anniversary of the Effective Date.


All of the above Exploration Licenses may be extended in accordance with the


Mining Law or the Exploration Regulations.


Exploration Rights.


(a) During the Exploration Period, the Company shall have exclusive right to


conduct Exploration for Iron Ore within the Exploration Area.


(b) The Company shall conduct Exploration within the Exploration Area in


compliance with the Exploration Regulations, including Section 7 thereof,


and this Agreement, notwithstanding any conflicting provisions of the


Exploration License. Unless expressly otherwise. provided in this


Agreement, if there is a conflict between the terms of the Exploration


Regulations and the terms of this Agreement, the terms of this Agreement


shall control.


(c) The rights of the Company to conduct Exploration under this Agreement


are limited to exploration for Iron Ore.


(d) During the Exploration Period the Company may conduct only such


Exploration as does not require the filing with or application to, or the


obtaining of any consent, approval, license or permit from, the EPA unless


such filing or application has duly occurred and any such consent,


approval, license or permit has been duly obtained; provided that if EPA


fails to act timely, (he Minister upon notice by the Company of such


failure may permit continued Exploration until such time as the EPA does


act. A copy of each such consent, approval, license or permit obtained by


the Company from the EPA shall be promptly filed with the Minister. For


clarity, the Company may commence Exploration in the Exploration Area


following issuance of the Exploration License, provided that the Company


has complied with the Exploration Regulations.


(e) Within no more than 120 days following the Effective Date, and no later


than the date of submission of the Company’s Exploration Program, the


Company shall provide the Government a project linkages plan which (i)


identifies the potentials for local suppliers, contractors and service


providers to service the Project, (ii) identifies key interventions to grow the


minerals input industrial sector, and (iii) sets out a project local purchase


 plan with clear milestones identified in terms of an increasing percentage


of local purchases of goods and services, and providing for bidding


preferences for local suppliers, contractors and service providers (provided


that such Persons offer quality, terms, delivery, service, quantity and price


at least comparable to those obtainable from other sources) (the


“Exploration Period Project Linkages Plan”), The Company shall update


the Exploration Period Project Linkages Plan once every 12 months during


the Exploration Period.





4.3 Retained Production Areas.


In addition to designation of Proposed Production Areas in accordance with


Section 5.1(a), prior to tire expiry of the Exploration Period, the Company may :


also nominate an area of Land for the purposes of access to and from the Proposed


Production Areas, the development and operation of Infrastructure, or as


reasonably required in connection with existing and future Operations, including


reasonable buffer zones around Proposed Production Areas (“Retained Production


Areas"). Any such Retained Production Areas shall be deemed to be part of the


applicable Proposed Production Area and shall be subject to the rights and


obligations set out under this Agreement (other than the Company’s right to


conduct Exploration in such Retained Production Areas).


4.4 Termination of Exploration Rights and Lapse of Exploration Area.


Except as provided in Section 5.1(d) with respect to Exploration conducted in a


Proposed Production Area timely designated in compliance with the requirements


of Sections 5.1(a) and 5.1(b), from and after the expiration of the Exploration


Period the Company shall have no further rights under this Agreement or any


prior agreement with or license or permit from the Government with respect to


any portion of the Exploration Area other than that encompassed by Proposed


Production Areas timely designated in compliance with the requirements of


Sections 5.1(a) and 5.1(b) (such portion(s) in which the Company no longer has


rights, the “Relinquished Area"). Unless otherwise permitted by the Government,


the Company shall, within a reasonable period, but not to exceed ISO days after


the expiration of the Exploration Period, cause the removal and proper disposal of


any property used by the Company or any of its contractors that is located on the


Relinquished Area.


4.5 Third Party Rights in the Exploration Area.


The Company acknowledges that the Government may grant rights to one or more


third parties to Explore for gold and other Minerals (but not, for the avoidance of


doubt. Iron Ore) in the Exploration Area, subject to the Company and each such


third party working in good faith to reach agreement with respect to the conduct of


their respective activities in the Exploration Area. The Company agrees that it


1 will engage in negotiations with any third party seeking such Exploration rights


regarding the conduct of their respective activities in the Exploration Area and


shall conduct such negotiations in good faith with the goal of reaching an


agreement that is reasonably acceptable to the Company and such third party. The


Company agrees that, if the Company and such third party fail to reach such an


agreement, the Company will submit to an independent dispute resolution process


with such third party, which process shall be reasonable in light of the


circumstances, including the financial resources of the third party. The Company


acknowledges that the Government shall have no obligation to intervene on behalf


of the Company in any dispute between the Company and such third party,


whether in connection with such negotiations or otherwise, but may intervene to


help resolve such dispute.


4.6 Pre-Feasibility Report,


The Company agrees that it will prepare, in good faith and in accordance with


( International Mining Standards, a study in accordance with the requirements set


forth below and in Schedule 2 attached hereto (the “Pre-Feasibility Report”) to be


submitted together with its notice designating a Proposed Production Area


pursuant to Section 5.1. The Pre-Feasibility Report will include (i) preliminary


engineering studies and financial analysis regarding the route selection, design,


investment requirements and other relevant factors to permit the construction of


the Railroad and the rehabilitation of the leased areas in the Port, as described in


Section 6.7(c), (h) an evaluation of the feasibility, from technical and financial


standpoints, of different power generation alternatives that will enable the


Company to comply with its obligations under Section 19.3, and (in) an


evaluation, from technical and financial standpoints, of downstream processing


alternatives, such evaluation to include pelletisation and iron-making. For the


purposes hereof, “preliminary”, means (i) with respect to any resource estimate


that will comprise part .of the Pre-Feasibility Report, the CRIRSCO Indicated


Resource standard and (ii) with respect to all other engineering studies in the Pre-


Feasibility Report, the Association for the Advancement of Cost Engineering Inc.


(AACE) Ciass 3 estimate standards or equivalent, specifically accuracy range of


±20%, with 5-15% of engineering completed, and 15-20% contingency. The Pre-


Feasibility Report for the Bomi and Mano River Deposits will be completed, and a


copy thereof will be provided to the Government no later than the second


f anniversary of the Effective Date, while the Pre-Feasibility Report tor the Bea


Mountain Deposit will be completed and a copy provided to the Government no


later than the third anniversary of the Effective Date, it being understood the Pre-


Feasibility Report will be provided for informational purposes only and not


subject to approval by the Government. The parties shall discuss in good faith


which of any of the power generation alternatives described in clause (ii) of the


second sentence of this Section 4.6 indicated in the Pre-Feasibility Report as


feasible will be evaluated further as part of the Feasibility Report and select one of


such alternatives for such further evaluation.


SECTION 5 MINING LICENSES


5.1 Designation of Proposed Production Areas and Application for a Minina License,


(a) If the Company identifies potentially exploitable Iron Ore deposits in the


Exploration Area of a type covered by its Exploration License with respect


to such Exploration Area that constitute Indicated Mineral Resources, it


may designate by notice to the Minister that all or one or more portions of


the Exploration Area are proposed production areas (each, a “Proposed


Production Area”). The Company may give more than one notice under





'"i \


:.!n.s Section 5. J;a), provided (hat, except as pcnuiUed pursuai*. !o Sections


5.3(a) and 5.4, no such notice may be given with respect to any portion of


the Exploration Area at any time following the expiration of the


Exploration Period of the Exploration License. Each such notice shall set


forth:


(i) the proposed boundaries of each Proposed Production Area


covered by such notice,


(ii) the nature, location and estimated quality of the Iron Ore


constituting the Indicated Mineral Resource in such Proposed


Production Area and


(iii) the form in which the Product(s) of the Iron Ore are expected to be


marketed by the Company.


Each notice with respect to a Proposed Production Area shall be


accompanied by (y) the report of a Competent Person setting forth his or


her conclusion that the deposit(s) constitute Indicated Mineral Resources,


and the basis for such conclusion, in the form required by the selected


CRIRSCO Code for the public reporting of Mineral Resources, and setting


forth the scope of any Iron Ore constituting Inferred Mineral Resources


located within the Proposed Production Area, and (z) evidence of payment


of the processing fee required by Section 16.1(a).


Except as provided in Section 5.3(a), if no notice designating a Proposed


Production Area in compliance with the requirements of this Section 5.1(a)


and Section 5.1(b) is delivered to the Minister on or before the expiration


of the Exploration Period of the Exploration License, then such


Exploration License shall automatically terminate without requirement of


action by the Minister or the Government. For the avoidance of doubt, the


termination of any single Exploration License shall not affect the


Company’s right to carry on Exploration and Operations in connection


with the remaining Exploration Areas or Production Areas, as the case


may be. that are not covered by the Exploration License so terminated. If


all of the Exploration Licenses have been terminated pursuant to this


Section 5.1, then this Agreement shall automatically terminate without


requirement of action by the Minister or the Government.


Each Proposed Production Area (i) shall consist of such part of the


Exploration Area as in the light of Internationa! Mining Standards is


reasonable, taking into account the extent and nature of the Iron Ore or


other Mineral constituting Mineral Resources, for the mining and recovery


of such Mineral Resources, including the Retained Production Areas, and


(ii) shall form a compact block as much as possible, with the borders


aligned to the true north-south and east-west. A Proposed Production Area


may not include Land (i) located within the boundaries of any cities,


commonwealth districts, municipal districts, cemeteries, transportation or


communication facilities, aqueducts, military base, port, Poro or Sande


grounds, and other grounds reserved for public purposes, except with the


consent of the officials authorized to administer or control the affairs of


silk's •mtuics, and .subject to such special terms uu'J i>aai;-ic conditions


as may be prescribed for the protection of surface users; (ii) the use of


which for Mining operations would violate Section 10.1 of the Mining


Law; or (iii) as otherwise reasonably agreed by the parties. A Proposed


Production Area may not include surface areas other than the surface


above the Iron Ore constituting Indicated and Inferred Mineral Resources


and any additional Land reasonably required for the extraction from the


earth of such resources. If other land is required to facilitate the


processing of extracted Iron Ore, the disposition of waste materials or


other activities not constituting actual extraction, the Company may


acquire that land as provided in Section 7,3.


(c) The Company shall submit to the Government, within 60 days following


the notice given under Section 5.1(a), detailed maps for each Proposed


Production Area covered by such notice, based on actual surveys using the


most current technology, that, with respect to a Proposed Production Area,


set forth the boundaries and coordinates of the area containing the deposits


from which Iron Ore is expected to be Mined. The maps shall be of such


scale and contain such detail, including geographical and topographical


information, (x) as may reasonably be necessary to identify accurately the


boundaries of the Iron Ore constituting Indicated and Inferred Mineral


Resources within such Proposed Production Area and (y) as may otherwise


reasonably be required by the Liberian Geological Survey for the mapping


..... of such Proposed Production Area.


(d) If the Company wishes to carry out additional Exploration within a


Proposed Production Area it may do so, provided that the work is covered


by an exploration work program that has been approved under the terms of


the Exploration Regulations. No budget or annual expenditure


requirements apply to such work, but all other provisions of the


Exploration Regulations as to the manner of carrying out such work and as


to reporting the results of such work remain applicable.


5.2 The Feasibility Report


(a) Unless the Company has complied with Sections 5.4(a) and (b)


(implementing the “marginal deposit” provisions of Section 5.3(1) of the


Mining Law), the Company shall within 18 months of the dale of


designation of an area as a Proposed Production Area, file with the


Minister, the following:


(i) a plan for the design, production and operation of efficient and


economic Mining, processing, rail transport, port loading, shipping


and marketing of Products from such Proposed Production Area


prepared by an internationally recognized mine engineering


consulting firm not affiliated with the Company or any of its


principal direct or indirect shareholders (the “Feasibility


Consultant”) substantially complying with Sections 5.6 through 5.8


(such plan, together with any and all amendments thereto, the


“Feasibility Report”), and





i


{i mi application for a Class A mining iicoiw. or an amendment to an


application for a Class A mining license or an amendment to a


Mining License, as the case may be, to permit the mining of such


deposits in the form required by the Mining Law and such


Regulations as are then in effect; and


(iii) a certificate of the chief executive officer of the Company dated the


dale of submission to the effect that (x) the Company has complied


through the date of such certificate in all material respects with its


obligations under this Agreement (except as to such defaults in the


performance by the Company of any of such obligations that have


been cured to the reasonable satisfaction of, or waived by, the


Minister), and (y) the Company is prepared to develop the Mine,


Mining Plant and Infrastructure in the manner set forth in the


Feasibility Report (other than as may reasonably be required to


respond to facts and circumstances not known to the Company at


the time the Feasibility Report was Filed), and setting forth the


manner in which the Company proposes to finance the construction


and acquisition of the Mine, the Mining Plant, the Infrastructure


and the related equipment (including the proposed proximate and


ultimate sources of such funds).


Except as otherwise provided in Section 5.3(a), the Company’s rights in


any Proposed Production Area timely designated under.and in compliance


with the requirements of Section 5.1(a) and (b) expire if the Company docs


not timely file.the maps required by Section 5.1(c) or does not timely file


the Feasibility Report and related materials as provided in this Section


5.2(a) and in Section 5.2(b).


The Feasibility Report required by Section 5.2(a) shall be accompanied


by evidence of (he payment by the Company of the processing fee


f required by Section 16.1 (b).


If the Company proposes to produce Products from two or more separate


sites using similar extraction techniques and shared processing or


beneficiation facilities, a single Feasibility Report shall be required and a


single Mining License shall be issued covering all such sites, subject to


the approval of the Minister of Finance for the treatment of such


operations and facilities as a single “mining project” under the Revenue


Code. If the Company proposes to use materially different extraction


techniques or substantially independent processing or beneficiation


facilities for separate mining sites, separate Mining Licenses and


Feasibility Reports shall be required for each site. Notwithstanding the


foregoing, nothing in this section 5.2 (c) shall require the approval of the


Minister of Finance for the treatment of any operations and facilities as a


single “mining project” where such operations and facilities are treated


as a single “mining project” pursuant to Section 5.2(d).


Provided that the Company is using “shared infrastructure facilities” for


their operations, all operations covered and facilities shared by one or


more Mining Licenses granted in respect of the MDA shall be treated as


 • ..ingle ‘ mining pi - >jcc: tor the purposes of the Revenue Code. As


used herein, the Company shah be deemed to be using “shared


infrastructure facilities” for operations covered by more than one Mining


License if such operations under the applicable Mining Licenses share


the use of significant components of the Infrastructure, including shared


use of rail, port, or processing plant Infrastructure.





(e) If multiple Mining Licenses are required by Section 5.2(c), and the


Company is not using shared infrastructure facilities for their operations,


the Ministry will notify the Ministry of Finance of the applications of the


Company, and the Minister of Finance is entitled to impose such


conditions upon such Mining Licenses as the Minister of Finance


reasonably deems necessary to comply with Revenue Code requirements


of separating the costs and expenses of separate “mining projects”. The


Minister of Finance reserves the right to require that a separate company


be formed to hold each Mining License and related assets if it determines


that to be the most appropriate means of separating the costs and


expenses of separate “mining projects”.








5.3 Extension Of The Due Dates For Filing Notices And Feasibility Report


(a) The Company may extend for a period of six months cither but not both of


(i) the time for designating Proposed Production Areas in compliance


with Sections 5. J(a) and (b) or


(ii) the time for filing the Feasibility Report and the related materials


required by Sections 5.2(a) and (b)


by payment., at least 30 days prior to the expiration of the time period


otherwise applicable, of the extension fee provided for in Section 16.1(c)


or (d), respectively, provided that the Company may not utilize for any


Proposed Production Area both the postponement provided for in clause


(ii) of this Section 5.3(a) and thd postponement provided for in Section


5.4.


(b) If, as contemplated by Section 5.1(a), the Company has timely designated


more than one Proposed Production Area within a single Exploration Area,


but believes that development of one or more of such areas should be


postponed as provided in Section 5.4, it may file a Feasibility Report with


respect to the areas initially to be developed and postpone the filing of a


Feasibility Report for the other areas by complying as to those areas with


the provisions of Section 5.4.


5.4 Postponement of Feasibility Report.


(a) If the Company believes that the “marginal deposit” provisions of Section


5.3(1) of the Mining Law are applicable to the Iron Ore resources


contained in a Proposed Production Area, and has not theretofore obtained


an extension under clause (ii) of Section 5.3(a), it may apply to the


\ i CV-





 Mini.-.O'- T, accordance '.vitli Section 5.3(1) ul the Mining Law within 12


months of the date of designation of such Proposed Production Area under


Section 5.1(a) for postponement of the obligation to deliver a Feasibility


Report and related materials under Sections 5.2(a) and (b) for up to two


years. The application shall be accompanied by





(i) a certificate of a Competent Person to the effect that in his or her


reasonable judgment sufficient information is available about the


Mineral Resource involved to conclude that it is not exploitable


under current technical and economic conditions, and the


production from such deposit cannot reasonably be expected to be


sold on commercially viable terms for a period of at least two years


(plus a reasonable period for Mine and Mining Plant construction)


from the date on which the Feasibility Report is otherwise required


to be filed under Section 5.2(a), and





(ii) a certificate of the chief executive officer of the Company to the


effect that the Company has given the Competent Person referred


to in clause (i) of this Section 5.4(a) all information available to the


Company relating to a determination as to the scope and other


characteristics of the Mineral Resources included in the such


Proposed Production Area.


(b) The Minister shall approve the application unless the Company is at the


time in default in the performance of its obligations under this Agreement


in a material respect. Any such delay period, if approved, will operate to


extend the due date of the Feasibility Report to be filed under Section


5.2(a) for a period of two years from the date originally due under Section


5.2(a) or such lesser period of time as is requested by the Company.





(c) Not more than 180 and not less than 90 days prior to the end of the initial


delay period, the Company may apply for a second delay period of up to


two years upon complying in full with the requirements of Section 5.4(a)


as though they were applicable by their terms to a second delay period.


(d) In order to retain its rights in a Proposed Production Area following an


approval by the Minister of a delay period, the Company:





(i) shall pay (in addition to (he surface rent payable with respect to


such Proposed Production Area as provided in the Revenue Code)


an annual postponement fee for each year of the delay, as


determined in Section 16.1 (d), and


(ii) shall file the Feasibility Report, and related materials required by


Sections 5.2(a) and (b) applicable to such Proposed Production


Area prior to the end of the delay period (or the second delay


period, if applicable).


(e) If a payment due under Section 5.4(d)(i) is not made when due, or if a


Feasibility Report, and related materials complying with Sections 5.2(a)


and (b) and applicable to such Proposed Production Area are not filed


win. ri Jv.c pursuant tu Section 5.4fd)(ii), and such default is not cured


within the applicable cure period provided in Section 25.2, all rights of the


Company to such Proposed Production Area shall terminate.


(f) If the Company elects to develop one or more of the areas as to which


development has been postponed as provided in this Section 5.4, it shall


timely file a new Feasibility Report encompassing its entire operation and


otherwise complying with the requirements of this Agreement governing


the filing and approval of Feasibility Reports. This requirement is to


ensure that the financial and technical capacity of the Company and the


environmental, social and other impacts of the proposed enlarged


operation are considered in their entirety and not on a piecemeal basis.


The new Feasibility Report shall reflect the actual state of facts as of its


date with respect to the development contemplated by the original


Feasibility Report, and may not merely incorporate the relevant provisions


of the initial Feasibility Report. If the new Feasibility Report is filed


before the original Feasibility Report is approved, it shall be deemed to


replace the original Feasibility Report. If it is filed at a later date, it shall


be deemed an amendment of the original Feasibility Report.


Mining License.


The Minister will grant the Company a Class A mining license for the Mining of


the Iron Ore proposed to be extracted from each Proposed Production Area subject


to the satisfaction of the following requirements:


(a) The Company timely complied with the requirements of Sections 5.1(a)


through (c).


(b) The Company has not been notified by the Government that it is in default


in any material respect in the performance of its obligations under this


Agreement or under the Exploration Regulations except as to such defaults


as have been cured to the reasonable satisfaction of, or waived by, the


Government.


(c) The Company has timely submitted a Feasibility Report, in accordance


with Sections 5.2(a) and (b) that complies with the requirements of


Sections 5.6 through 5.8, and the Feasibility Report has been approved by


the Minister pursuant to Section 5.9.


(d) The Company and the Government have entered into an Environmental


Restoration Obligations Funding Agreement or the Company has furnished


the Environmental Restoration Obligations Guarantee.


(c) The Company has furnished the Mining Guarantee.


If the Company elected to postpone in accordance with Section 5.4 the submission


of a Feasibility Report, for one or more but less than all of such Proposed


Production Areas as contemplated by Section 5.3(b), on approval of the amended


Feasibility Report as contemplated by Section 5.4(f), the Minister shall amend the


Mining License issued in connection with the original Feasibility Report (if


previously issued) if the foregoing clauses (b) through (d) have been complied


with as applicable to the expanded project contemplated by the amended


Feasibility Report.


Any Mining License issued pursuant to this Agreement shall recite that it is issued


subject to the terms and conditions contained in such Mining License and this


Agreement, and that it is not assignable or transferable in any way other than as


permitted by the terms of this Agreement.


Any failure by the Government to give notice in accordance with Section 5.5(b)


shall not affect the Government’s rights and remedies under this Agreement to the


extent the Company was in default in a material respect in the performance of its


obligations or the discharge of its liabilities under this Agreement or under the


Exploration Regulations which have not been cured to the reasonable satisfaction


of, or waived by, the Government.


Components of the Feasibility Report.


(a) The Feasibility Report for a Proposed Production Area shall comply with


applicable Law and International Mining Standards, shall include the basic


technical and linancial components described in this Section 5.6(a) and


shall also include the additional components set forth in Sections 5.6(b)


through (g):


(i) "" a description of the Iron Ore to be Mined, the Mining and


processing methods proposed to be used, and the quality of the


Produces) to be marketed;


(ii) a statement of the expected Production rates lor the Iron Ore to be


Mined over the term of the Mining License and for the output of


the expected Product(s);


(iii) a report of a Competent Person setting forth his or her conclusion


as to the amount of Iron Ore constituting the Proven Mineral


Reserves and Probable. Mineral Reserves in the Proposed


Production Area, and die basis for such conclusion, and at die


election of the Company, in the form required by the selected


CRIRSCO Code for the public reporting of Mineral Resources;


(iv) a development plan setting forth the basic design and operating


specifications for each proposed Mine and related Mining Plant,


Infrastructure and equipment (the “Development Plan”!. which


shall, among other things,


(1) implement the requirements of Sections 6.6, 6.7 and 19.3;


(2) include maps at the scale required by the Ministry setting


forth the proposed location of each proposed Mine and


related Mining Plant and Infrastructure, and any other


activities or improvements described in Section 6.7(e) or


II .6 of the Mining Law and, in the case of each activity


referred to in Section 6.7(e) or Section 11.6(c), (e) or (f) of


the Mining Law, setting forth the capacity expected to be


available for public utilization, provided that activities


described in Section 11.6(a) or 11.6(b) of the Mining Law


shall be limited to those reasonably necessary for the


implementation of the Development Plan;


(3) include a capital development plan (in reasonable detail);


(4) include the capacity demonstration measures required by


clause (ix) of this Section 5.6(a);


(5) include a construction (or acquisition), completion and


commencement of operations schedule for each proposed


Mine and all related Mining Plant, Infrastructure and


equipment proposed in the Development Plan


(6) include a timetabte for development as follows: Bomi -


completion of construction and acquisition no later than


September 30, 2016 and commencement of production no


later than October 30, 2016; Mano - completion of


construction and acquisition no later than September 30,


2018 and commencement of production no later than


October 30, 2018; Mid Bea - completion of construction


and acquisition no later than September 30, 2021 and


commencement of production no later than October 30,


2021;


(7) include final engineering studies and financial analysis


regarding the route selection, design, investment


requirements and other relevant factors to permit the


expansion of the Railroad and pie Port as described in


Section 6.7 (for the purposes hereof, “final” means AACE


Class 2 estimates or equivalent, specifically ±10%


accuracy, 30-35% of engineering completed, 10-15%


contingency); and


(8) include a construction, completion, and commencement of


operations schedule for the power generation alternative


selected by the parties pursuant to Section 4.6 (the “Power


Plant”):


(v) a plan for Operations (an “Operations Plan”) that sets forth the


Company’s plan for operating each proposed Mine and related


Mining Plant, Infrastructure and equipment, including expected


staffing requirements and implements the requirements of Sections


6.6 and 6.7,


(vi) a plan for marketing and selling the Products (including projected


principal customers and projected means of transporting Produces)


from Liberia to such customers) for the Mining Term.


Ci\ j


•..'■■ii'1 jj'-'jir; RCcge;- plan j>; described in Section 5.6(c);


(viii) a financing plan, setting forth the manner in which the Company


proposes to fund the Development Plan and the methods the


Company proposes to use to fund the LMP, the SIA and the SAP;


and


(ix) a program for capacity verification and testing to demonstrate that


the principal components of each proposed Mine and related


Mining Plant, Infrastructure and equipment have substantially the


operating capacities set forth in the Development Plan, which shall


demonstrate that the completed facilities have the capacity to


perform as specified in the Feasibility Report.


(x) If the Mine, Mining Plant and Infrastructure are designed so that


any portion of the facilities for transporting ore to the port or the


facilities at the port will be used for less than the entire output of


the Mine, then the Feasibility Report shall include provision for


comparable testing of such portions of such facilities based on their


intended capacities. Thus, if the Feasibility Report and the


Development Plan provide for a two-stage development, with


transport and port facilities initially being sized for one Mine and


are later to be expanded to provide for a second (or expanded)


Mine, the capacity demonstration tests for the transport and port


facilities shall be conducted once at the lower capacity levels and,


upon completion of any expansion, at the higher capacity levels.


(b) The Feasibility Report shall include an Environmental Impact Assessment


Study Report (“EIA”) and an Environmental Management Plan (“BMP"')


complying with Section 5.7 and applicable Law, prepared by an


internationally recognized independent environmental consultant not


affiliated with the Company or any of its principle direct or indirect


shareholders, as filed by the Company with and approved by the GPA.


(c) The Feasibility Report shall include a Social Impact Assessment (“SIA”)


and Social Action Plan (“SAP”) complying with Section 5.8 and


applicable Law.


(d) The Feasibility Report shall include (i) final engineering studies and


financial analysis regarding the route selection, design, investment


requirements and other relevant factors to permit the expansion of the


Railroad and the Port as described in Section 6.7; and (ii) a mineral value


added study that assesses possible further value addition within Liberia to


Iron Ore Mined by the Company, including pelletization of such Iron Ore


and identifies the critical conditions for realization of such downstream


investments.


(e) The Feasibility Report shall include a project linkages plan that (i)


identifies the potentials for local suppliers, contractors and service


providers to service the project, (ii) identifies key interventions to grow the


minerals input industrial sector, and (Hi) sets out a project local purchase


pi:: ■ ■>.•>(!'< milestones • ■t-v i-t;fic.I in terms oi si. increasing percentage


of local purchases of goods and services, and providing for bidding


preferences for local suppliers, contractors and service providers (provided


that such Persons offer quality, terms, delivery, service, quantity and price


at least comparable to those obtainable from other sources);


The Feasibility Report shall include a skills and technology development


plan that contains an annual projection of the Company’s commitments to


the development of local human resources and planned expenditure on


research and development within Liberia and the region indicating how the


Company proposes to discharge its obligations under Section 11, including


detailed plans and programs for the recruitment and training of citizens of


Liberia, including timetables and schedules, in connection with the


construction and operation of the proposed Mines, Mining Plant and


Infrastructure.


The Feasibility Report shall include a confirmation from the Feasibility


Consultant substantially to the effect that:


(i) the Company has the design, procurement and construction


management capacity necessary to implement the proposed


Development Plan, or has identified contractors with which it will


contract for the design, procurement and production of each


proposed Mine and related Mining Plant, Infrastructure and


equipment that have the capacity to carry out such activities;


(ii) the Company has the management capacity to operate each


proposed Mine and related Mining Plant, Infrastructure and


equipment in accordance with the proposed Operations Plan;


(iii) each proposed Mine and related Mining Plant, as designed, will if


constructed in accordance with the designs and maintained in


accordance with good maintenance practices, support the planned


operating levels of such Mine as set out in the Feasibility Report;


(iv) the Railroad, Port and Power Plant, as designed, will, if constructed


in accordance with the designs and maintained in accordance with


good operating practices, (A) support the transport and loadoul of


the projected production capacity of each proposed Mine for the


term of this Agreement assuming each such proposed Mine and its


related Mining Plant are operating at the design levels specified in


the proposed Development Plan; (B) will have at least the excess


capacity required by the terms of this Agreement and (C) will have


such additional useful life following the termination of this


Agreement as set forth in the proposed Development Plan;


(v) the geotechnical survey work done in connection with locating all


proposed Mining Plant and Infrastructure is sufficient to support


the conclusion that the sites of such proposed Mining Plant and


Infrastructure are suitable for the construction and operation of


those facilities;


\!


(vi) the EIA done in connection with the proposed siting of, and the


subsequent operations of, each proposed Mine and related Mining


Plant, Infrastructure and equipment was conducted in a matter


consistent with the World Bank “Environmental Health and Safety


Guidelines for Mining” and otherwise complies with the


requirements of Section 5.7;


(vii) the design of each proposed Mine and related Mining Plant,


Infrastructure and equipment is in accordance with contemporary


best practice for the design of mines and related facilities of similar


size and type and is appropriate for the climate and geography of


Liberia, and the Company has under license from the Government


or has otherwise acquired rights to sufficient Land (£) to1


accommodate in an environmentally sound manner in accordance


with International Mining Standards and applicable Law all Mining


Plant and Infrastructure expected to be necessary for the Mining


and all proposed processing of Iron Ore in accordance with the


proposed Development Plan, (y) reasonably to insulate surrounding


areas in accordance with International Mining Standards from


possible adverse impacts of Operations, and (z) to provide for all


activities proposed to be undertaken as part of its ongoing


environmental protection plan;


(viii) the completion verification procedures set forth in Section 6.1 and





the capacity demonstration procedures set forth in the proposed


Development Plan are sufficient reasonably to demonstrate that


each proposed Mine and all related Mining Plant and Infrastructure


have been completed in accordance with the proposed


Development Plan and can reasonably be expected to have the


operating capacity specified in the proposed Development Plan;


(ix) the HMP, if implemented as proposed, will limit the likely amount





of environmental damage to limits established in the World Bank


“Environmental Health and Safety Guidelines for Mining”, the


Company’s mine closing plan meets the standards established by


World Bank “Environmental Health and Safety Guidelines for


Mining” and the estimated cost for such plan (valued in current


dollars) is reasonable, and such plan otherwise complies with the


requirements of Section 5-7; and





(x) the mineral value added study referred to in Section 5.6(d) fairly


assesses the costs of possible adding further value in Liberia to the


output of each proposed Mine and identifies and reasonably


quantifies the critical conditions for the realization of such


downstream investments.


If the Company’s Feasibility Consultant is unwilling to provide a


confirmation with respect to any matter set forth in any of the foregoing


clauses of this Section 5.6(g), the Company shall arrange for such


confirmation to be provided by a separate internationally recognized








If


35 .)


mining engineering or other firm with appropriate expertise not affiliated


with the Company or any of its principal direct or indirect shareholders.


(h) Any amendment to a Feasibility Report shall be permitted only if it results


in such Feasibility Report, as so amended, complying with the


requirements of Sections 5.6 through 5.8.


The Environmental Impact Assessment Study Report and the Environmental


Management Plan,


(a) The EIA and the EMP shall comply with applicable requirements imposed


by the EPA and with this Section 5.7. The EIA shall at a minimum


identify pre-existing environmental conditions and set forth the potential


adverse impact of the construction and operation of the Mining Plant and


the Infrastructure proposed in the Feasibility Report shall take into account


all activities or improvements to be undertaken by the Company and


- referred to in Section 6.7(d), 6.7(e) or 11.6 of the Mining Law, and shall


otherwise comply with applicable Law. The EMP shall at a minimum set


forth detailed plans consistent with the EIA for the mitigation of


environmental harm attributable to, and the restoration or remediation of


the environment to the extent affected by, the implementation of the


Development Plan and subsequent Operations, including the actions to be


taken by the Company to comply with Sections 8.1 through 8.3 of the


Mining Law, International Mining Standards and other applicable Law,


and shall in any event comply with applicable EPA requirements and


• Section 5.7(b).


(b) The EMP must include a closure management plan and a closure


management budget designed to ensure that upon closure (j) each proposed


Mining Plant and Infrastructure shall not present any health or safely


issues (including provision for the control of acid drainage and other long¬


term environmental hazards) and (u) each Proposed Production Area and


the surroundings of any Mining Plant or Infrastructure not located in such


Proposed Production Area shall be restored to productive use or reforested


or where restoration is impractical, suitably remediated. The closure


management plan must include a list and assessment of risk and any


uncertainties associated with the preferred closure option, address the


social aspects of closure and rehabilitation, and provide a process for


participation by the community and other stakeholders in closure


management and monitoring. The closure management budget shall


provide a realistic initial estimate of the expected closure cost, broken


down by principal activities. Notwithstanding any other provision of this


Agreement or applicable law, the Government acknowledges that the


Bomi and Mano River Deposits have been mined in the past by third


parties, and that nothing in this Agreement shall impose on Company, its


Shareholders or any of their affiliates or subcontractors any such closure or


other responsibilities or obligations with regard to or emanating from work


performed in such sites by third parties.


(c) The EMP must also set forth the means by which the Company proposes


to ensure the availability of funds to finance its environmental restoration


and remediation obligations under Sections 8.2 and 8.3 of the Mining Law


(the “Environmental Restoration Obligations”) so that the cost of closure


will be borne by the Company and not the public or the Government. The


Company shall, at its election, (i) agree in writing with the Government to


a “pay-as-you-go” funding scheme (such agreement, an “Environmental


Restoration Obligations Funding Agreement”) or (ii) provide financial


support (an “Environmental Restoration Obligations Guarantee”! for such


obligations in the form of a letter of credit in form and content reasonably


acceptable to the Minister of Finance and the Minister issued on behalf of


the Company from a third party financial institution with a long-term


credit rating of at least A (or its equivalent) from at least two


internationally recognized credit-rating agencies and providing for


vedetenninalion of estimated closure costs at least once every three years


and corresponding adjustments in the amount of the letter of credit in


amount reasonably acceptable to the Minister of Finance and the Minister.


In the case of third party credit support, if the party supplying the letter of


credit no longer has a long-term credit rating of at least A (or its


equivalent) from at least two internationally recognized credit-rating


agencies, the letter of credit must provide that if the Company does not


within 90 days thereafter secure a substitute letter of credit from another


third party financial institution satisfying the requirements of this section,


the letter of credit may be called upon for the maximum amount then


available thereunder, subject to the requirement that such amount be


deposited in a trust account from which it may be withdrawn only for the


purposes of financing the Company’s environmental restoration and


remediation obligations. Nothing in this section shall be deemed to limit


the Company's obligations or liability for environmental restoration and


remediation under applicable Law.


(d) The Company shall have held public hearings on the ElA and the EMP at





least in Monrovia, in the county seat of each county in which a Proposed


Production Area is located an<£ in the county seal of each county in which


the Railroad, Port, Power Plant or any road described in Section 6.6 is


located or to be located, and shall have included as pail of the Feasibility


Report a statement of the means taken to publicize the hearings, an


indication of the numbers of persons who attended such hearings and their


affiliates, a summary of the issues raised at such hearings, and a discussion


of the actions taken by the Company in response to such hearings. The


Ministry may set forth by regulation additional standards consistent with


accepted practice in OECD countries for the location of, notification of


and conduct of such hearings.


5.8 Social Impact Assessment and Social Action Plan





(a) The SIA shall set forth the potential adverse impact of the construction and





operation of each proposed Mine, and the related Mining Plant and


Infrastructure on the individuals and communities resident in and around


(i) each Proposed Production Area and any Mining Plant or Infrastructure


not located within a Pro|X)sed Production Area, or (ii) areas affected by the


proposed processing or transport of Product whether using Company-








/


37 r


 provided Infrastructure or equipment or facilities or equipment provided


by the Government or third parties.





(b) The SAP shall set forth reasonable measures, in light of the costs involved,


for the mitigation of the adverse impact referred to in Section 5.8(a) above,


as well as making provision for the continuing economic and social


viability of centers of population that have formed and which may form as


a result of Operations during the term of this Agreement. The SAP shall


include a Resettlement Action Plan (“RAP") component if communes


located in or adjacent to each Proposed Production Area or to Mining Plant


or Infrastructure not located in the Proposed Production Area should under


International Mining Standards be resettled for health or safety reasons.


The RAP shall provide for (but not be limited to) suitable arca(s) of


resettlement to be undertaken at Company expense with key emphasis on


shelter and livelihood continuity.


(c) The Company shall have held public hearings on the SIA and the SAP at


least in Monrovia, in the county seat of each county in which a Proposed


Production Area is located and in the county seat of each county in which


the Railroad, Port, Power Plant or any road described in Section 6.6 is


located or to be located, and shall include as part of the Feasibility Report


a statement of the means taken to publicize the hearings, an indication of


the numbers of persons who attended such hearings and, to the extent


known to the Company, the names of the organizations such persons


represent, a summary of the issues raised at such hearings, and a


discussion of the actions taken by the Company in response to such


hearings. The Ministry may set forth by regulation additional standards


consistent with accepted practice in OECD countries for the location of,


notification of and conduct of such hearings, and may establish generally


applicable requirements for third party review of the SIA and the SAP


comparable to the technical review of the Development Plan and


Operations Plan undertaken by the Feasibility Consultant.


Approval of the Feasibility Report and Grant of Mining License.


(a) The Minister may, within 90 days of receipt of the Feasibility Report (the


“Review Period”), (i) appoint independent consultants and/or bankers, at


the Government’s own cost, to assist in its review of the Feasibility


Report, (ii) reasonably request additional information with respect to any


aspect of the Feasibility necessary to satisfy applicable requirements of


this Agreement and upon the provision of such additional information by


the Company, the Review Period shall recommence unless otherwise


agreed with the Minister, and (iii) recommend reasonable changes in any


component of the Development Plan to the extent the Minister deems the


changes necessary to satisfy applicable Law on the requirements of this


Agreement. In the absence of notice from the Minister that the Feasibility


Report is incomplete, the Feasibility Report shall be deemed to be


complete as to form and content at the end of the Review Period.


(b) Unless the Government has notified the Company that (i) the design or


Operation of each proposed Mine and related Mining Plant, Infrastructure


and equipment in accordance with the Development Plan would violate


any provision of applicable Law; or (a) the Company is in default in any


material respect in the performance of its obligations or the discharge of its


liabilities under this Agreement or under the Exploration Regulations (as


modified by this Agreement) which have not been cured to the reasonable


satisfaction of, or waived by, the Government, and provided that


immediately following the issue of a Class A mining license pursuant to


Section 5.9(g) the Company shall comply with Section 20.4, the Minister


shall approve the Feasibility Report, or the Feasibility Report as amended,


as the case may be, if:


(i) the Feasibility Report and its specific components comply with die


provisions of the Mining Law and the terms of this Agreement;


(ii) the EPA has approved the EMP and the EIA as complying with the


requirements of this Agreement, International Mining Standards


and applicable Law, and


(iii) each of the EMP, the EIA, the SIA, the SAP, the Project Linkages


Plan and the Skills and Technology Development Plan have been


generally made available to the public for at least 60 days prior to


the date of approval of the Feasibility Report, including by way of


(A) posting thereof on-line on a Government provided website,


(B) making available copies thereof for examination at the relevant


ministries during normal business hours, (C) publishing notice of


such posting and ayailability in one or more newspapers of wide


circulation in Monrovia and (D) publishing a summary thereof in


one or more of such newspapers provided that to the extent the


Government does not effect (A) or (B) above within 45 days of


being provided the relevant documents by the Company for such


purpose, the Company shall not be required to have complied with


those provisions.


(iv) the capital expenditure plan shows that the Company’s debt/equity


ratio taking into account initial working capital at the


commencement of regular commercial operations shall not exceed


3:1,


(v) the Company has provided an opinion of an internationally


recognized investment banking firm to the effect that it has


reviewed the Company’s plan to finance the construction,


equipping, start-up and entry into commercial production of each


proposed Mine and ail related Mining Plant and Infrastructure, and


that, in its professional judgment, it is reasonable to conclude that


the Company has available to it the financial resources necessary to


carry out all such activities in keeping with the schedule and other


terms of the Feasibility Report, the Feasibility Report as amended,


as the case may be, and this Agreement (such repoit to specify the


bases lor its conclusion), provided that to the extent the conclusion


of such investment banking firm is based on funding to be provided


by or through the Company’s shareholders or their related Persons,


such shareholders or related Persons shall have agreed with the


Government to be jointly and severally liable to provide funding to


the Company, and


(vi) Section 6.8 of this Agreement has been amended to reflect all


modifications thereof reasonably requested by the Government so


that the reporting obligations set forth therein arc appropriately


tailored to the specific type of Mine(s) covered by the


Development Plan.


(c) Any failure by the Government to give notice to the Company in


accordance with Section 5.9(b) shall not affect the Government’s rights


and remedies under this Agreement to the extent the Company was in


default in a material respect in the performance of its obligations or the


discharge of its liabilities under this Agreement or under the Exploration


Regulations (as modified by this Agreement), which have not been cured


to the reasonable satisfaction of, or waived by. the Government.


(d) The Minister shall be deemed to have approved the Feasibility Report


unless the Minister has notified the Company in writing of the reasons for


disapproval not later than 60 days after the end of the Review Period.


Following any such disapproval and the resubmission by (lie Company of


an amended, modified or supplemented application for a Class A mining


license or Feasibility Report, the Minister shall be deemed to have


approved the Feasibility Report unless within 60 days of such amendment,


modification or supplement the Minister has notified the Company in


writing of the reasons for disapproval.


(e) In the event lire Minister has given the Company timely notice of its


disapproval of the Feasibility Report (a “Disapproval Notice.” and such


disapproved Feasibility Report, a “Disapproved Feasibility Report”), the


Company and the Ministry shall discuss in good faith (i) what, if any,


amendments, modifications or supplements to the Disapproved Feasibility


Report would make the Feasibility Report acceptable to the .Ministry and


(ii) what would constitute a reasonable period of time for the Company to


submit to the Ministry for approval a Feasibility Report as so amended,


modified or supplemented. In the event that the parties fail to reach


agreement with respect to the matters described in the foregoing sentence


within 180 days of the date of the Disapproval Notice the parties shall


jointly appoint an expert who is a mining industry professional with


substantial working experience in the conduct of feasibility or related


studies who shall determine: (i) what, if any, amendments, modifications


or supplements to the Disapproved Feasibility Report should be made such


that the amended Feasibility Report should be approved pursuant to this


Agreement; and (ii) what would constitute a reasonable period of time for


the Company to submit to the Ministry for approval a Feasibility Report as


so amended, modified or supplemented.


(0 If the Company fails to submit to the Ministry for approval an amended,


modified or supplemented Feasibility Report within the time period (i.)


agreed by the parties, and has failed to cure such default within the


applicable ours period provided in Section 25.2, or (ii; determined by the


expert in accordance with Section 5.9(e) (to the extent the expert


determines that such amendment, modification or supplement to the


Disapproved Feasibility Report is required), all rights of the Company to


the Proposed Production Areas covered by the Disapproved Feasibility


Report may be terminated by the Government upon prior written notice to


the Company and all right, title and interest in the Disapproved Feasibility


Report shall automatically vest in the Government subject to the Company


continuing to be able to use such information in connection with other


projects in Liberia. The provisions of Section 5.9(c) or (f) do not impose


any obligation upon the Minister to approve any amended, modified or


supplemented Feasibility Report, it being understood that all requirements


of this Section 5.9 shall apply thereto.


(g) No later than five Business Days following the latest to occur of the


conditions set forth in Section 5.5(a) through (e), the Minister shall grant


the Company a Mining License covering each Proposed Production Area


covered by the approved feasibility Report. In the case of the approval of


a Feasibility Report filed as contemplated by Section 5.4(f) that proposes


to add additional Proposed Production Areas to Production Areas for


which a Mining License has already been issued, the Minister shall amend


the Mining License to include the additional Proposed Production Areas.


Each Production Area so covered by a Mining License is an “approved


Production Area” for the purposes of this Agreement. Unless expressly


• otherwise provided in this Agreement, if there is a contlict between the


terms of any Regulations and the terms of this Agreement, the terms of this


Agreement shall prevail,


5.10 Term of Mining Licenses.


(a) The term of any Mining License granted to the Company under this


Agreement shall commence on the date such license is issued and shall end


on the earlier of (i) the date the Mining License is relinquished pursuant to


Section 5.10(c) or (ii) the date the Mining License is terminated pursuant


to Section 25 (the “Mining Term”). The Company is entitled to renew any


Mining License for consecutive additional terms not to exceed 25 years


each if the Company has complied with ail of its payment obligations


under this Agreement and under the Revenue Code, and the Government


has not notified the Company that it is in default in any materia! respect


with its other obligations under this Agreement or the Mining Law, other


than any defaults which have been waived by, or cured to the reasonable


satisfaction of, the Government, if:


(i) the Company demonstrates that there continues to exist in one or


more approved Production Areas Proven Mineral Reserves of Iron


Ore in sufficient quantities to support continued mining for ul least


80% of the renewal term requested by the Company (assuming no


interruptions to production),


(ii) if the continued operations will involve significant additional


investment or significant changes in production processes (» c. a








41


fundamental change in the technology or operation of any major


component of its Operations) the Company has delivered an


updated Feasibility Report setting forth the Company’s


development and operations plans for the extended term and which


otherwise complies with the requirements of Section 5.6 through


Section 5.8, and


(iii) the Company satisfies such other conditions as are required by


applicable Law.


The Company may apply for renewal of a Mining License not more than


three years and not less than one year prior to the date of expiration of the


current Mining License.


(b) Any failure by the Government to give notice to the Company in


accordance with Section 5.10(a) shaii not affect the Government’s rights


and remedies under this Agreement to the extent the Company was in


default in a material respect in tile performance of its obligations or the


discharge of its liabilities under this Agreement or under the Mining Law


(as modified by this Agreement), which have not been cured to the


reasonable satisfaction of, or waived by, the Government.


(c) At any time following the issuance of the Mining License, the Company


may file a request with the Government to relinquish the Mining License


as of a date specified therein. Such request shall be filed at least 180 days


prior to the desired relinquishment date and shall include the Company’s


confirmation of its obligation to, and willingness to carry out, the approved


closure management plan applicable to the Operations carried out under


the Mining License and payment of the processing fee described in Section


16.1(f). The Government shall approve such request if


(i) on or prior to the date of such notice and on or prior to the date of


the issuance of the Government’s response to such request, the


Government shall not have notified the Company that the


Company is iti default in any material respect in the performance of


its obligations or the discharge of its liabilities under this


Agreement, which defaults have not been cured to the reasonable


satisfaction of. or waived by, the Government, and


(ii) the Minister, the Minister of Finance and the head of the EPA have


reasonably determined that the arrangements made by the


Company for funding the performance of its approved closure


management plan are sufficient fo secure such performance,


(iii) the Exploration Guarantee (if applicable) has not been revoked and


the Exploration Guarantor satisfies the Exploration Guarantor Net


Worth Requirements,


(iv) the Environmental Restoration Obligations Guarantee (if


applicable) has not been revoked and the guarantor thereunder


remains an Acceptable Third Party Financial Institution, and


(v) the Mining Guarantee has not been revoked and the Mining


Guarantor satisfies the Mining Guarantor Net Worth


Requirements,.


The Government shall notify the Company of its decision no later than 120


days following the date of filing of such request. If the Government grants


such request, the Mining License shall be relinquished as of the date


requested by the Company, provided, that, on such date, there is no


payment default and no other material default unwaived by the


Government in the performance by the Company of its obligations under


this Agreement. Upon relinquishment of the Mining License this


Agreement shall terminate and all provisions hereof relating to


termination, including Section 26, shall apply.


(d) Notwithstanding the relinquishment of a Mining License pursuant to


Section 5.10(c), the Company shall remain liable to the Government for all


obligations and liabilities that accrued prior to the date set as the effective


date of relinquishment and have not been waived by the Government.


Upon relinquishment of a Mining License, all right, title and interest in the


feasibility Reports or portions thereof covered by such Mining License


shall automatically vest in the Government subject to the Company


continuing to be able to use such information in connection with other


projects in Liberia.





5.11 Additional Capital Investment or Material Changes in Operations.


If the Company proposes additional investment relating to changes in Mine


operating technology or procedures, which investment (i) exceeds 20% of the


investment amount provided for in the initial Feasibility Report or (u) which


investment constitutes a fundamental change in the technology or operation of any


major component of its Operations or a substantial expansion of the output of the


Mine, it may not make such investment until it has delivered and the Minister has


approved in the manner provided in Section 5.9 an updated Feasibility Report


setting forth the Company’s development and operations plans and otherwise


complying with the requirements of Section 5.6 through Section 5.8. If the


Company proposes to make substantial changes in its methods of Operations that


would materially affect employment or could materially affect the environment or


the social structures of the communities in the area affected by such changes, it


may not do so until it has updated its E1A, BMP, SIA and SMP, and the plans


referred to in Sections 5.6(e) and 5.6(1) to reflect the consequences of such


proposed changes, such plans have been made available for public comment for at


least 60 days in the manner required by clause (iii) of Section 5.9(b), and the


Minister (the EPA in the case of the E1A and the EMP) has approved such plans,


such approvals not to be unreasonably withheld or delayed.


SECTION 6 CONSTRUCTION AND OPERATIONS





6.1 Capital Expenditures: Construction.


(a) Upon the issuance to the Company of a Mining License pursuant to





Section 5, the Company shall incur capital expenditures and commence.





.4-





43


continue and cause to be completed construction, acquisition and


installation of each proposed Mine and all related Mining Plant,


Infrastructure and equipment, all in accordance in all material respects


with the schedule set forth in the Development Plan contained in the


approved Feasibility Report relating to such Mining License, and shall


cause the capacity demonstration tests provided for in Section 6.2 to occur


within the period of time provided in Section 6,2, The Company may not


make material changes in the Development Plan unless it applies for and


receives the approval of the Minister to appropriate amendments to such


plans, and to the extent applicable, the Feasibility Report and the related


plans, reports and studies provided for in Sections 5.6 through 5.8, which


approval shall not be unreasonably withheld. Any such application shall


be accompanied by the processing fee required by Section 16.1(e) or (f), as


applicable.


Prior to undertaking any required first stage capacity demonstration test set


forth in Section 6.2, the Company shall deliver to the Minister:


(i) a certificate of the Feasibility Consultant to the effect that


(A) such firm has reviewed the approved Feasibility Report, the


Development Plan and the records of the Company


pertaining to the construction, acquisition and installation of


the installations, plant and equipment covered by such


capacity test and has inspected the same, and


(B) based on such review and inspection such firm believes that


die construction, acquisition and installation of such


installations, plant and equipment have been completed in


accordance in all material respects with the designs, plans


and specifications contained in the Development Plan or


otherwise forming the basis/of the approved Feasibility


Report (except to the extent not scheduled for completion


until after the commencement of production of marketable


Iron Ore in the commercial volumes contemplated by the


Feasibility Report), and


(ii) a certificate of the chief executive officer of the Company to the


effect that the construction, acquisition and installation of such


installations, plant and equipment have been completed in


accordance in all material respects with the designs, plans and


specifications contained in the Development Plan or otherwise


forming the basis of the approved Feasibility Report (except to the


extent any portion thereof is not scheduled for completion until


after the commencement of production of marketable Iron Ore in


the commercial volumes contemplated by the Feasibility Report).


Prior to undertaking any second stage capacity demonstration tests set


forth in Section 6.2, the Company shall deliver to the Minister:


(i) a certificate of the Feasibility Consultant to the effect that


(A> ^>uc'n him has reviewed the approved Feasibility Report, the


Development Plan and the records of the Company


pertaining to the construction, acquisition and installation of


all Mines and all related Mining Plant, Infrastructure and


equipment provided for in the approved Feasibility Report


and has inspected the same, and


(B) based on such review and inspection such firm believes that


the construction, acquisition and installation of all Mines


and ail related Mining Plant, Infrastructure and equipment


have been completed in accordance in all material respects


with the designs, plans and specifications forming the basis


of the approved Feasibility Report, and


(ii) a certificate of the chief executive officer of the Company to the


effect that the construction, acquisition and installation of all Mines


and all Mining Plant, Infrastructure and equipment have been


completed in accordance in all material respects with the designs,


plans and specifications forming the basis of the approved


Feasibility Report.


Completion.


(a) With respect to each proposed Mine, within 180 days of the scheduled


completion date thereof set forth in the Development Plan (subject to delay


on account of force majeurc), the Company shall demonstrate, through


performance of the proposed capacity demonstration testing program sol


forth in the Feasibility Study, that the Mine and all related Mining Plant,


Infrastructure and equipment have substantially the operating capacities set


forth in the Development Plan. As noted in Section 5.6(a), required


extended capacity demonstration covering major components of the Mine,


Mining Plant and Infrastructure may be conducted separately. Thus, if the


Feasibility Report and the Development Plan call for a two-stage


development, with the initial stage being completion of a Mine, with the


initial Iron Ore processing facilities and railroad and port facilities tailored


to the capacity of that Mine, followed by a second stage encompassing the


development of a second (or expanded) Mine and upgrade of the Iron Ore


processing facilities, railroad and port, each capacity demonstration test for


the first stage Mine, Mining Plant, Infrastructure and equipment shall be


completed within 180 days of the stage one scheduled completion date for


the components covered by that test, and each capacity demonstration test


for the second stage shall be completed within 180 days of the stage two


scheduled completion date for the components covered by that test.


(b) The Company shall give the Ministry notice of, and the opportunity to


have representatives witness, ail testing required by the Development Plan


and shall evidence the satisfaction of each component of the required


capacity demonstrations by the timely delivery to the Minister of a


certificate of the Feasibility Consultant to the effect that the Company has


successfully completed such component of the capacity demonstration


program and has demonstrated the capacities required by such component


(selling out the requirements and time period covered by the


demonstrations and certifying specifically as to the actual results of the


demonstrations).


(c) The Company shall pay minimum Royalties under this Agreement based


on the greater of actual Iron Ore shipments and assumed shipments equal


to 80% of design capacity as set forth in ihe approved Feasibility Report


from the outside day set forth in the first sentence of Section 6.2(a) for the


capacity demonstrations required by Section 5.6(a)(ix) until the date on


which such capacity demonstrations have been certified as required by this


Section 6.2. So long as the Company complies with the preceding


sentence there are no other consequences for the failure of the Company to


satisfy the capacity demonstration requirements.


6.3 Mining Term Operations.


(a) All Mining, processing or-treatment of Iron Ore by the Company shall be


conducted in accordance with International Mining Standards and


applicable Law. The Company undertakes to use all reasonable efforts in


accordance with such standards and law to maintain the production of


marketable Iron Ore of the quality and in the quantity contemplated by the


Feasibility Report, provided it is economically and technically feasible to


do so.


(b) The Company may not undertake any activity referred to in Section 6.7 or


11.6 of the Mining Law except to the extent expressly covered in the


Company’s EIA and approved in the context of the Company’s EMP and,


then only within a Production Area or an area in which the Company is


otherwise entitled by Law and by agreement with any relevant Landowner


to carry on such activities. The preceding sentence does not authorize the


Company to take any action that would violate Section 10.1 of the Mining


law. The Company may not transfer to any Person timber removed from


the Land pursuant to Section 6.7(d)(4) or 11.6(a) of the Mining Law


without the consent of the Forestry Development Authority The Company


shall not deprive any Person of a constant and reasonable supply of usable


water from or pollute a previously utilized traditional source without


providing an alternative source of substantially the same quality and


quantity, nor shall the Company, without the Minister’s consent and at


least 30 days prior notice to the affected community, interfere with any


water rights enjoyed by any user under any agreement with the


Government made prior to the date of execution of this Agreement; it


being understood that the Government shall be responsible for the removal


of the water bottling plant operated by the Liberia Bottling and Beverage


Company situated in Bomi County, at the sole expense ol'the Government;


The Company’s use of water under this Agreement will be subject to


charges as provided in applicable Law or in the absence of applicable Law,


as provided in Section 16.6.


(c) The Company shall cause all Mines, Mining Plant, Infrastructure and


equipment constructed, renovated or acquired by it to be maintained


throughout the Mining Term in a sale and sound condition in accordance


with International Mining Standards and the requirements of insurers.


(d) The Company shall construct and operate all Mines, Mining Plant, and


Infrastructure and equipment in accordance with the Development Plan


and the Operations Plan set forth in the approved Feasibility Report. The


Company may not make material changes in the Development Plan or the


Operations Plan unless it applies for and receives the approval of the


Minister, which approval may not be unreasonably withheld, to


appropriate amendments to such plans, and to the extent applicable, the


Feasibility Report and the related plans, reports and studies provided for in


Sections 5.6 through 5.8. Any such application shall be accompanied by


the processing fee required by Section 16.1(e) or (f), as applicable.


(e) In the event of any loss or damage to (i) the property of the Company,


including any property leased or deemed to be leased from the


Government or a third party; (ii) any property used in Operations title to_


which is retained by the Government or shall automatically revert to the


Government upon termination of this Agreement (whether under Section


26 or otherwise); or (m) any property which constitutes social


infrastructure (c.g., schools or medical facilities) which is constructed by,


or on behalf of, the Company, the Company shall promptly proceed to


restore such property:


(i) in the case of property described in the foregoing clause (i) or (ii),


to the extent necessary to begin or resume Operations as


contemplated by the Feasibility Report, and


(ii) in the ease of property described in the foregoing clause (iii), to the





extent necessary to allow the Company to fulfill its obligations


under this Agreement for which such property is utilized.


(f) The Company may contract the operation of all or an/ portion of a


completed Mine, Mining Plant or Infrastructure to any Person organized


under the Laws of Liberia who has the technical expertise and financial


ability to conduct such operation and who is not a shareholder of the


Company or an Affiliate of a shareholder of the Company. If the


Company contracts any operation in accordance with the foregoing


sentence, the Company is responsible to the Government for the


compliance by such third party with all requirements of this Agreement


applicable to the operations undertaken by such contractor as though such


operations were undertaken by the Company. The requirements of Section


11.1 shall apply to the operations of any such contractors). Material


operating contracts shall be disclosed in each annual operating report of


the Company under Section 6.8(e).





6.4 Recovery Shortfalls.





(a) If in the reasonable opinion of the Government, the Company is failing


without good cause to produce, transport and ship marketable Iron Ore at


not less than 80% of the rate indicated in the approved Feasi lility Report,








r 7


47 \U


M re


it may give notice in writing to the Company. Within three months of the


receipt of this notice the Company shall


(i) commence work to improve its operations to the reasonable


satisfaction of the Government, provided that the Company shall in


no event be obliged to conduct Mining, processing or treatment


activities otherwise than is economically and technically feasible at


the time, and


(ii) submit to the Government evidence that the steps it is taking will


lead to compliance with Section 6.3(a).


If the Government remains unsatislied with the Company’s response to


such notice, the Government may commission an independent technical


study to determine a fair average recovery and/or shipment rate taking into


account the nature of the reserves then being mined, the nature of the


Mines, Mining Plant, Infrastructure and other equipment (assuming they


are of the design and quality set forth in the Feasibility Report and have


been prudently maintained and operated), and the economic and technical


feasibility of achieving increased recovery and/or shipment of Produces)


by the Company in accordance with the standards set forth in Section


6.3(a). Such study shall be carried out by an internationally recognized


independent mining engineering consultant appointed by the Government


from a list of three such consultants, none of whom shall be affiliated with


the Company or any of its principal direct or indirect, shareholders


(including any Shareholder or Scsa Goa), named by the Company on the


request of the Government. Each of the Government and the Company


may submit information to the consultant. The fees and expenses of such


consultant shall be borne by the Company, but unless the consultant


concludes the performance of the Company’s Production is at least 10%


less than the fair average recovery rate referred to in the first sentence of


this Section 6.4(b), the Company shall be entitled to offset the fees and


expenses of such consultant against Royalties subsequently payable by the


Company under Section 15,1 of this Agreement.


If following the completion of such study, the Company fails within a


reasonable period to achieve the fair average recovery rate indicated by


such study, the Government may increase the Royally applicable to such


Products under Section 15.1 in proportion to the extent that recovery of


such Products by the Company is less than 90% of the fair average rate


indicated by such studies. But at no time shall the payment of such


increased Royalty free the Company from its obligation to satisfy Section


6.3(a).


In no event shall recovery shortfalls caused by a suspension order


incorrectly given in accordance with Section 24 hereof shall fall within the


scope of this Section 6.4 and shall not give any rights to the Government


in accordance with this Section 6.4.


6.5 lnr.tfa Liberia-Based Value-Added Production Capacity.


(a) The Company will work towards and assist the Government in achieving


.the policy of the establishment or expansion of downstream metals


processing facilities in Liberia in relation to pelletization or other further


beneficiation, refining and/or metals manufacturing and fabricating (to the


extent not already carried out by the Company pursuant to an approved


Feasibility Report) if, in light of recognized economic, technical and


scientific standards, the Iron Ore mined by the Company is amenable to


such additional activities and provided it is economically and practically


feasible to do so.


(k) At any time if the Company wishes to establish its own beneficiation,


pelletisation, refining or manufacturing facilities in Liberia, it may do so


pursuant to applicable Law, provided that any such facilities shall be


deemed additional Mining Plant to be incorporated in an amended


Feasibility Report satisfying the requirements of Sections 5.6 through 5.8.


(c) The Company shall submit to the Minister copies of any studies relating to


the feasibility of establishing in Liberia the facilities as described in


Section 6.5(a) prepared by or at the direction of the Company.


(d) In the event that pelletisation facilities are proposed to be established in


Liberia by an entity other than an Affiliate of the Company for the further


processing of Products of the type produced by the Company, the


Company shall agree to make its Product(s) available to that entity for


further processing on conditions not less favorable than the conditions that


can be obtained by the Company for sale of such products outside of


Liberia. This obligation of the Company is subject and subordinate to any


beneficiation, pelletisation, refining, manufacturing or marketing contracts


with third parties entered into by the Company prior to the Company’s


receipt of a request to commit Product(s) to such facilities, but in the case


of any such contract, onl/for such period of time as the Company has no


right to terminate (or to decline to renew or extend) such contract.


(e) Within five years of first production the Company must finance a pre¬


feasibility study for the establishment in Liberia of a facility for the next


value added step in the transformation of Iron Ore into steel. “Value


added” means at a minimum both an increase in value ami an increase in


purity (grade) of the Product(s) of the Company’s Mine(s). If at the time


of the study the parties cannot agree on the appropriate next value


addition step or steps, the parties will select an international expert in


iron and steel production to define the appropriate focus of the pre¬


feasibility study, with the costs of such expert to be shared equally by the


Government and the Company.


(I) The pre-feasibility study shall be conducted for the Government by an


internationally recognized independent consulting firm with significant


experience in the design of Iron Ore processing facilities and the


production of iron and steel selected by the Company from a list of such


firms provided by the Government. Unless within 360 days of receipt of


the completed pre-feasibility study the Company undertakes to establish


(directly, with appropriate partners or by agreement with a third party)


such a value added facility, the Government shall be entitled to utilize the


pre-feasibility study for any purpose, including the establishment of such a


value added facility itself (directly or with partners) or to permit third


parties to utilize such pre-feasibility study to solicit third parties to


establish such a value added facility and, as between it and the Company,


shall retain all right, title and interest therein. If the Company fails to


notify the Government of its interest in establishing such a value add


facility within 90 days of its receipt of a copy thereof, it shall be deemed to


have declined to establish such a value add facility.


6.6 Concerning Road Construction and Renovations.


The Company will build a two-lane asphalt paved all-weather road from


Tubmanburg to Mano River (Kongo) for general public use with capacity for


handling heavy traffic (the “Road”), Not later than the second (2"'1) anniversary of


the Effective Date, the Company will begin preliminary work on the Road,


including a feasibility study (which shall include route, design and construction


specifications, completion milestones and such other provisions reasonably


required by the Ministry of Public Works), survey, and completion of the tender


process for construction. Prior to such time, the Ministry of Public Works will


develop the standards for the design, construction and paving of the Road.


.. . Construction of the Road shall begin within not more than one (1) year of the


Government’s approval of the feasibility study referenced in this Section 6.6. The


Road shall be completed to the satisfaction of the Ministry of Public Works as


soon as possible thereafter, but in any case within not more than two (2) years of


the Government’s approval of the feasibility study referenced in this Section 6.6.


Completion and conformity of the Road with agreed standards shall be certified


by an internationally recognized road engineering consulting firm.


6.7 Concerning Railroad and Port Construction and Operations and Ore


Transportation.


(a) The Development Plan shall provide for the construction by the Company


or another entity that is mutually acceptable to the Company and the


Government of a railroad (the “Railroad”) from the Mines to that certain


portion of the Port as designated and marked on the map attached as


Exhibit 10A, with the capacity to move from the Mines to the Port on a


continuing basis the maximum sustained output of Products contemplated


by the Feasibility Report. The Railroad shall be designed so that it can be


expanded on a commercially feasible basis to carry on a continuing basis


twice as much traffic as is contemplated by the preceding sentence but the


Company shall not be under any obligation to build such additional


capacity except as it may elect pursuant to this Section 6.7. The


Government or any third-party may elect to have the capacity of the


Railroad expanded to service the requirements of the Government or such


third-party with the costs of such expansion to be borne by the


Government or such third parly, as applicable. The Government shall


retain title to the fixed assets of the Railroad.








\.


N.A’vviiiisundiny tile foregoing commitment to develop and construct the


Railroad pursuant to the foregoing paragraph, the Company shall be


entitled, working in conjunction with the Ministry of Public Works


(MOPW), to develop new roads and/or rehabilitate existing roads from its


mining sites to the Port, along the corridor designated in Exhibit 10B


hereto (which exhibit shall be prepared by the MOPW and attached to this


Agreement as an exhibit when it has been approved by the MOPW), as


may be reasonably required by the Company, subject to compliance with


applicable Laws, including the receipt of all necessary approvals and


permits, in connection with such development or rehabilitation. As a


condition to the use by the Company of new or existing roads to transport


Iron Ore to the Port, the Company shall conduct a short-form feasibility


study in accordance with terms of reference and other criteria specified by


the Government. Subject to approval by the Government of such


feasibility study, for a period of three (3) years following the approval of


such feasibility study, the Company shall be allowed to transport Iron Ore


to the Port via such roads by trucks in the manner specified in and in


accordance with such feasibility study. As soon as the Railroad becomes


operational and can be used to transport the iron Ore to the Port, the


Company shall cease transporting the Iron Ore by trucks and shall only


transport it by the Railroad. The Company shall be responsible, at the


direction of the MOPW, for performing and paying for repair of any


damages and abnormal wear to roads and other infrastructure caused by its


use of public roads to transport Iron Ore. The Government shall retain title


to any such roads constructed by the Company.


The Development Plan shall provide (i) for the rehabilitation by the


Company of the Port and, (ii) provided the Government and the Company


agree, in the event the Feasibility Report contains a finding that the


Freeport of Monrovia cannot reasonably support the Iron Ore exporting


volume anticipated for the Company’s Operations throughout the term of


this Agreement after opportunities for expansion of the Freeport of


Monrovia have been exhausted, for the construction by the Company or


another entity that is mutually acceptable to the Company and the


Government of a new port or jetty (and related logistic areas) as required


to support its operations which shall be suitable and at a reasonable


distance from the Company’s mining sites. The Government shall provide


Marine Services and retain legal title to the leased areas of the Port and


shall receive title to any fixed assets of the Port as built by the Company,


while the Company shall have priority rights to possession and use of such


assets subject to the terms and conditions of this Agreement, including


those with respect to the rights of third parties to utilize such assets


described in Section 6.7(d). Immediately upon the expiration of the Term


or any extensions thereof or earlier termination of this Agreement, all


rights of possession, control, and use shall revert to the Government. For


the avoidance of doubt, the Company shall at no time be exempt from


complying with all applicable Laws, including in particular all Laws with


respect to environmental contamination and remediation, in respect of its


activities relating to the Port or the transportation of ore by railroad or


roads. The Government shall, in consultation with the Company, and on


ror.idbL; rioiKc to the Company, authorize third use of excess


capacity of the Port, provided that the Company or the Government


confirms that excess capacity exists and third party use of such excess


capacity does not unreasonably interfere with the efficient and economic


conduct of the Operations. The technical and commercial terms for such


third party use of the excess capacity shall be mutually agreed to in good


faith among the Government, the Company, and such third parties in


accordance with acceptable international industrial standards. A formula


to share the revenue fees from such third-party use shall be agreed upon in


good faith between the Government and the Company. Such third party


access and use shall be at no cost to the Company, and all related costs


shall be borne by the third party. The Company is not authorized to


provide port operational services to any such third part)' users of the leased


areas of the Port or any new port that the Company may be authorized to


construct hereunder.


(d) The Company has priority use of the NIOC and LMC Iron Ore piers


located in the Port during the Exploration and Production Operating


Periods and any extensions thereof, subject to all applicable Laws, the


terms of the Port Lease, and rights of third parties relating to the Port,


including the rights of APMT Terminals Liberia, Ltd. (“APMT”) as set


forth in the Act to Ratify the Concession Agreement Between the National


Port Authority and APM Terminals Liberia, Ltd., ratified September 17,


2010 (the '‘Freeport Concession Agreement'’), and APMT’s rights to use


the LMC Pier during the “Construction Phase” (as such term is defined in


Section 1.01 and Appendix 4 of the Freeport Concession Agreement) as


set forth in Sections 4.04 and 7.06 of the Freeport Concession Agreement.


The Company shall use its best efforts to reach a separate written


agreement with APMT as to mutual use of and access to the LMC Pier


during the “Construction Phase” (as such term is defined in Section 1.01


and Appendix 4 of the Freeport Concession Agreement), or until such


earlier time as APMT no longer has need to use the LMC Pier. Any such


agreement with APMT shall, to the extent possible, minimize any material


adverse effects on the ability of. APMT to perform its operations or


complete construction as contemplated by the Freeport Concession


Agreement and, in particular, Section 4.04(b) thereof.


(e) In accordance with applicable Law, and subject to a feasibility study at the


sole expense of the Company to determine commercial viability to be


approved by the Company and the Government, the Company shall make


provision for additional passenger service and the transportation of non¬


bulk cargo on the Railroad.


(f) If the Government or one or more third parties wish to use the Railroad to


move bulk cargo, the Company shall permit such usage subject to the


negotiation by the Company and the Government or such third party of


commercially reasonable rates for such usage. The costs of all required


additions to rolling stock and motive power to accommodate such usage


shall be borne by the Government or such third party', as applicable. If


accommodation of the requested additional usage would materially


adversely oifed the ability ol'lhe Company to move iron Ore to the Port or


handle Iron Ore trains at the Port, the Government or such third party shall


bear the cost of the additional investment needed to enhance the Railroad


to avoid such material adverse effect.


(g) If the Government or one or more third parties wish to use the Railroad to


carry bulk cargo, the Company may continue to operate the Railroad itself


and carry out the operation of all trains on the Railroad, or the Company


may transfer operational responsibility for the Railroad to an operating


company owned by the Company and each other entity that has


contributed to the capital investment (exclusive of motive power and


rolling stock) in the railway, and such operating company may either


operate the Railroad and all trains, or may be responsible solely for the


operation and maintenance of the fixed rail facilities and allow all persons


that meet non-discriminatory operating standards to operate their own bulk


cargo trains on the fixed rail facilities, Whether the operator is the


Company or such new operating company, the Railroad shall be operated


in a way that does not discriminate against the shipments of any Person.


(h) During the Exploration Period, the Company shall develop preliminary


studies estimating the cost of constructing, respectively, each of the


Railroad and the Port, based on the Company’s estimate at the time of the


respective required rail and port capacity, the additional works and


equipment that would be required, to double the capacity of the Railroad as


- • contemplated by Section 6.7(a) and' to rehabilitate and expand the Port or


construct a new port or jetty as contemplated, by Section 6.7(c), and the


estimated cost of such additional works and equipment. The capital


development plan required by Section 5.6(a)(iv)(3) to be included in the


Feasibility Study shall set forth the estimated costs of constructing,


respectively, each of the Railroad and the Port, shall identify with


reasonable specificity the additional works and equipment required to


double the respective capacity of the Railroad as contemplated by Section


6.7(a), and shall set forth the cost of such additional works and equipment


(if performed or provided immediately after the respective completion of


the initial railroad). The additional equipment referred to in this Section


6.7(h) does not include the motive power and rolling stock required to


increase the capacity of the Railroad.


(i) If the Government or a third party wishes to provide for expansion of the


Railroad’s capacity as contemplated by Sections 6.7(a) and (f), the


Company may elect to, but is not required to, itself carry out or contract


for the additional work required. If it does so elect, it shall agree to


complete the expansion within a commercially reasonable period of lime,


assuming that the necessary' funding is timely received and subject to force


majeure (it being understood that the Company is not obligated to incur


binding commitments until funding for those commitments is in hand). If


it does not so elect, the third party responsible for the expansion work shall


submit the expansion designs and work plan to the Company for approval,


which shall not be withheld unless such designs and works plans would


unreasonably interfere with Operations.


"f"





s >


reasonable efforts to provide land to be leased to the Company on mutually


acceptable terms for use by the Company in connection with the


Company’s Iron Ore Operations that require use of facilities at the Port.


Such land will be leased under a separate lease agreement between the


National Ports Authority and the Company. Such lease agreement


(including a detailed map of the area in the Freeport of Monrovia that is


subject to the Port Lease) shall be affixed as Exhibit 9 to this Agreement


following execution of such lease agreement by the parties thereto.


(k) If there is a dispute with the Company as to any matter arising under


Sections 6.7(1), (g) or (i) that is not resolved within 60 days after it is


identified by any party to such dispute by notice to the other parties as a


“senior management dispute”, each party to such dispute shall promptly


designate a senior member of the management of its ultimate controlling


entity to participate in discussions to determine whether such dispute can


be resolved, ff the Government is a party to the dispute, the President shall


designate a minister of cabinet rank to participate on behalf of the


Government.


(l) If a resolution of any such dispute cannot be reached within 105 days after


designation pursuant to the preceding paragraph as a “senior management


dispute,” the Company, the Government or a third party that is a party to


the dispute may demand that the dispute, be submitted to a technical


dispute resolution committee. The'Company shall designate two persons


to participate in such committee, and the other parlies to the dispute


(which may be the Government, the Government and one or more third


parties, or one or more third parties) shall also designate two persons to


participate in such committee. One person designated by each side shall


have experience in cither railroad or port operations, as (he case may be,


and shall not be regularly employed or retained by any person party to or


/ having an interest in the outcome of the dispute. The four persons so


selected shall not be regularly employed or retained by any person party to


or having an interest in the outcome of the dispute and shall not be a


citizen of Liberia or of any country whose nationals have a material


interest in the dispute. The four persons so selected shall choose a fifth


person who shall have experience in railroad operations, and shall not be


regularly employed or retained by any person party to or having an interest


in the outcome of the dispute and who shall chair the committee. The


recommendations of the committee as to the resolution of the dispute shall


be binding on the parties to the dispute except that if the recommendations


of the committee depend upon a determination of the legal meaning of any


provision of this Agreement, the Company or the Government may seek


arbitration under the terms of this Agreement as to the correctness of such


determination.


(m) Disputes among third parties or between one or more third parties and the


Government are not subject to the terms of the two preceding paragraphs.











--n


 Company Reporting Requirements.





The Company shall submit to the Minister (and the Minister of Finance, in the


case of Section 6.8(f)) the following Production and financial reports, in addition


to the financial statements required by Section 17.4:





(a) prior to the grant of a Mining License, those reports required by Section 6


of the Exploration Regulations;





(b) following the grant of a Mining License but prior to satisfaction of the


capacity demonstration requirement set forth in Section 6.2, a six-monthly


report on the progress of construction of the Mining Plant and


Infrastructure provided for in the approved Feasibility Report, indicating


progress and expenditures to date, and estimated date of satisfaction of the


capacity demonstration requirement;


(c) a quarterly statistical report-'(which shall be delivered for every quarter,


including months ending an annual reporting period) beginning with the


calendar quarter in which commencement of the Production Operating


Period occurred, setting forth (i) the amounts of Iron Ore Mined, the


amounts of Iron Ore processed at the Mine, the amounts of Product(s)


shipped to the port, the amounts of Product(s) exported, the amounts of


Product(s) otherwise disposed of and the stocks of mined Iron Ore and


Product(s) at the end of the period at the Mine and at the port (Produces)


in transit being deemed located at the port), (a) the number and location of


the workings on which work was performed during the preceding quarter,


(Hi) the number of workers employed thereon at the end of the quarter, and


(iv) a brief description of the work in progress at the end of the quarter and


of the work contemplated during the following quarter;


(d) a quarterly operating report, beginning with the calendar quarter in which


the commencement of the Production Operating Period occurred,


concerning the progress of Us operations in the Production Areas that are


the subject of a Mining License issued pursuant to this Agreement,


specifying in full:





(i) those workings in which technically exploitable Minerals are


considered to have been found, regardless of whether the deposits


of such Minerals are deemed to be commercial or not (together


with ali data relative to the estimated volumes and the kind or kinds


of such technically exploitable Minerals encountered and the


analyses of such data), the number and description of workings


which have been placed in commercial production and full


particulars concerning the disposition of such production, the


number of workers employed on each of such workings, the work


in progress at the end of the quarter in question, and the work


contemplated during (he ensuing quarter; and


(ii) the work accomplished during the quarter in question with respect





to all installations and facilities directly or indirectly related to its


exploitation program, together with the work contemplated for the





f !\ 22


• *





55


ensuing quarter with respect to the same installations and facilities


and indicating both actual and estimated investment in such


installations and facilities made, committed or to be committed


with respect to such installations and facilities;


an annual operating report, beginning with the Financial Year in which the


commencement of the Production Operating Period occurred, which shall


include:


(i) the number and description of the workings which were in progress


at the end of the Financial Year preceding the Financial Year in


question (with a showing as to which were then in commercial


production), the number and description of workings abandoned


during the Financial Year in question; the production of each of the


workings, regardless of whether in commercial production or not,


with a full description of the kind and quality and analyses of


Products produced from each working, and the number of workings


on which activities are continuing at the end of the Financial Year


in question, but which have not gone into commercial production;


(ii) the total volume of Products, kind-by-kind, broken down into


volumes Mined, volumes transported from the Mines and their


corresponding destination, volumes stockpiled at the Mines or


... elsewhere in Liberia, volumes sold or committed for export


(whether actually shipped- from Liberia or not), and volumes


actually shipped from Liberia (with full details as to purchaser,


destination and terms of sale);


(iii) work accomplished and work in progress at the end of the year in


question with respect to all of the installations and facilities related


to the production program, together with a full description of al!


work programmed for the ensuing Financial Year with respect to


such installations and facilities including a detailed report of all


investment actually made or committed during the year in question


and al! investment committed for the ensuing Financial Year or


Financial Years;


(iv) a report on all other Production and activities for that Financial


Year; .........


(v) as a supplement, a report describing in reasonable detail the actions


the Company has taken during the reporting year to comply with


the requirements of each of Sections 8 through 12;


an annual financial report, beginning with the Financial Year in which the


commencement of the Production Operating Period occurred, setting forth


the quantity of Product(s) produced and shipped from Liberia or


Transferred to a third party in Liberia during the Financial Year and the


computation of the Royalties or any other Taxes and Duties imposed with


respect to the quantity of Product(s) so shipped or so Transferred, in each


case paid or remaining to be paid on such shipments or Transfers;


(g) 'iny r/ionlhly opcrutiny reports that ii sec.,-iar:\ to any ot i's


Ailihates: and


(h) on request from the Government from time to time, evidence of the


Company’s compliance with Section 6.3(a),


The Company shall also provide such additional information as is necessary to


keep the Government ftiUy informed of all operations and activities, wherever


conducted in Liberia, and of its plans in respect thereof. All monthly and


quarterly reports required under this Section 6.8 shall be submitted within 30 days


of the end of the quarter in question, and all annual reports required under this


Section 6.8 shall be submitted within 60 days of the end of the Financial Year in


question. Each report referred to in Sections 6.8(a), 6.8(b), 6.8(c), 6.8(d) and


6.8(e) shall be certified as true and correct by the chief executive officer and the


chief operating officer of the Company. The report referred to in Section 6.8(f)


shall be certified as true and correct by the chief executive officer and the chief


financial officer of the Company. ^


6.9 Books and Records.





The Company shall maintain at its principal office in Liberia, or at such other


offices as the Minister may approve, copies of all maps, geological, mining or


other earth science reports and mineral analyses (together with all field data which


support such reports or data), production records, marketing and financial reports


and other data obtained or compiled by the Company as a result of Operations.


The Government shall have full access to inspect on site all such information, data


and material, following receipt by the Company of at least two Business Days’


prior written notice provided that such access does not unreasonably interfere with


Operations.


6.10 Inspection.


The Ministry and other agencies of the Government having jurisdictions (such as


the EPA and any governmental entity at the time responsible for employee safety


and welfare) shall have the right to monitor Operations (including inspecting


relevant documents) from time to time and inay, without prior notice but at


reasonable times of day and without materially interfering with the normal


conduct of the Company’s business, visit and inspect any of the facilities and


Operations of the Company in Liberia, provided that nothing herein shall limit the


right of the Government to access or inspect facilities and Operations of the


Company in order lo investigate criminal, security, employee health and safety or


environmental matters, which inspections may, for the avoidance of doubt, be


conducted at any time.


6.11 Insurance.


(a) At all times during the Term (including during the construction period) the


Company will maintain, with financially sound and reputable insurers,


insurance with respect to its properties, including any properties leased or


deemed to be leased from the Government or a third party, any other


property used in Operations title to which is retained by the Government or








O,


\v J


57


shall ;u«iunv!-'cai:y ;v;vcr '••• 'h" <’aw.:p-.;v !er-»in;Kion of the


Agreement (whether puisuant to Section 26 or otherwise), and any


properly which constitutes social infrastructure (e.g., schools or medical


facilities) which is constructed by, or on behalf of, the Company, against


such casualties and contingencies, of such types, on such terms and in such


amounts (including deductibles, co-insurance and self-insurance, if


adequate reserves are maintained with respect thereto) as is customary in


the case of entities of established reputations engaged in the same or a


similar business. Such insurance shall include protection against loss or


damage to such property, third-party liability insurance and, to the extent


commercially available on reasonable terms, business interruption


insurance (as to which the Government shall be an additional named


insured or loss payee as its interest so appears). The Company shall


provide the Government at least annually with evidence as to the existence


of such insurance.


(b) Where an event occurs which gives rise to an ability to make a claim


against the insurance maintained by the Company pursuant to Section


6.11(a), unless the Government consents otherwise, the Company shall


promptly file a claim with the relevant insurance company and, in the case


of third party liability insurance, the Government shall be entitled to file a


claim. Unless the Government consents otherwise, the Company shall


be obligated to re-invest the proceeds of insurance covering loss or


damage to any properly which constitutes social infrastructure which is


constructed by, or on behalf of the Company or title to which is retained


by the Government or shall automatically revert to the Government upon


termination of this Agreement (whether pursuant to Section 26 or


otherwise) for the restoration or replacement of such property. In respect


of any other insurance coverage for loss or damage to property, the


Company shall be entitled to re-invesl or retain the insurance proceeds as it


shall determine in its sole discretion, provided, that if the Company does


not re-invesl the proceeds and as result thereof there is no material


production or processing in a Production Area, then in respect of that


Production Area the Company shall relinquish the Mining License


applicable to such Production Area.


SECTION 7 LAND AND FACILITIES


7.1 Surface Rights.


Subject to Section 6.3(b). the Company shall have the right, subject to the


requirements of applicable Law, to enter upon and utilize Land included in (i) the


Exploration Area, (ii) as otherwise specified in Sections 5.1(b) of this Agreement,


and, (iii) following the issue of a Mining License, in 3 Production Area for


purposes of and incidental to Operations; subject to the payment of reasonable


compensation to the Landowners or Occupants of Land so utilized for loss of or


diminution in the value of such Land or the products thereof attributable to


Operations.








\ & ’ •‘N


7.2 Limitation on Exploration and Production.


This Agreement may not be construed to permit the Company to Explore for Iron


Ore or any other Minerals outside of the Exploration Area or, following the end of


the Exploration Period, other than Exploration for Iron Ore in a Proposed or actual


Production Area, or to produce any Minerals from outside an approved Production


Area.


7.3 Acciuisition of Land Use Rights Outside a Production Area.





(a) To the extent otherwise permitted by applicable Law and not already


provided for in this Agreement, the Company is permitted to acquire


surface land use rights in respect of Land which is not included in the


Production Area sufficient to entitle it to construct, install and operate


Mining Plant or Infrastructure. If following the approval of a feasibility


Report the Company cannot reasonably obtain sufficient land use rights to


enable it to construct, install and operate Mining Plant or Infrastructure


provided for in the approved Feasibility Report, the Government will make


available to the Company for such purposes Land owned by the


Government and not subject to a valid leasehold or other third parly


interest and not otherwise required for the achievement of other


Government programs. If the Government cannot make available to the


Company sufficient surface rights in such Land and the Company is


unable to acquire sufficient rights from relevant third parties on reasonable


terms and conditions, the Government shall assist the Company in


acquiring sufficient rights for such purposes, including providing


assistance for the purposes of clarifying the nature and extent of any title


to Land. If no other surface rights are reasonably available to the


Company for such purposes the Government will use its powers of


eminent domain to obtain such rights from an unwilling third party.


(b) Surface rights made available by the Government from I,and owned by the


Government shall be subject to applicable provisions of the Revenue


Code, including any obligation to pay surface rental.


7.4 Costs of Acquisition of Land Use Rights: Termination of Riuhts.





(a) All costs incurred by the Company or by the Government at the request of


the Company in connection with the acquisition by the Company from


parties other than the Government of rights in Land for activities provided


for in an approved Feasibility Report, including costs incurred by the


Government pursuant to its exercise of its powers of eminent domain, shall


be borne by the Company. Payment shall be due within 30 days following


receipt by the Company of a statement from the Government setting forth


the amounts for which reimbursement is sought.





(b) The Company’s right to occupy such Land shall terminate at the end of the


Term, or, if earlier, at such time as it is no longer used in the Company's


business if other use can be made of such Land without danger to the


Occupants of Land or other users of the relevant areas or interference with


the Company’s business.





•v


r


'0 \&


 SECTION a COMMUNITY RESOURCES





8.1 Community Responsibility.


It is the policy of the Government and the obligation of the Company to develop


programs lor the development and maintenance of the economic and social


viability of the centers of population that have formed and that may form as a


result of Operations during the term of this Agreement. Upon the reasonable


request of the Government at any time the Company shall work with the


Government and the local communities affected by Operations to establish plans


and programs for the implementation of this objective, and thereafter the


Company shall in good faith cooperate with the Government with regard to its


efforts concerning the realization of such plans and programs, provided that the


Company shall be under no obligation to provide financial assistance or otherwise


commit resources for the purpose of achieving such plans and programs other than


as specified in this Agreement.


8.2 Community Funding Obligation


(a) The Company shall provide the annual social contribution set forth below


(the “Annual Social Contribution”), as provided in this Section 8.2(a).


Commencing on the Effective Date and thereafter on each anniversary of


the Effective Date until the end of the year prior to the year in which the


Start of Commercial Production occurs with respect to the first Production


Area, the Company shall pay Two Million Dollars (US$2,000,000) within


ten (10) days of the Effective Date for the first year of the Term; Two and


a Half Million Dollars (US$2,500,000) on each anniversary of the


Effective Date until the year in which the Start of Commercial Production


occurs and on each anniversary of the Effective Date. Thereafter, the


Company shall pay an Annual Social Contribution of Three Million and


One Hundred Thousand Dollars (US$3,100,000) (adjusted annually for


inflation in the manner provided for in Section 8.2(b)). The Annual Social


Contribution shall be deposited and held as provided in Exhibit 6. The


Annua! Social Contribution shall be in lieu of any obligation of the


Company pursuant to Section 9.3(b) of the Exploration Regulations.


(b) The amount payable pursuant to Section 8.2 (a) shall be adjusted annually


for inflation for each payment after the initial payment in proportion to the


change in Deflator over the year ending on the last day of the month


immediately prior to the due date of each payment. The Government’s


determination of such amount shall be final, absent manifest error.


(c) The Annual Social Contribution and utilization of such funds for specific


projects shall be managed by a dedicated committee (the “Committee”) in


accordance with the structures established by the Government in


consultation with the Committee from time to lime, provided that in all


cases (i) the Company shall at all times have at least one representative on


the Committee; (ii) structures and processes will be established to provide


for the participation (in a decision-making or advisory capacity as the


Government shall determine from time to time) of officials, businesses and


residents from the affected counties in the identification and selection of





\


 projects to be supported with funds from the Annual Social Contribution;


(iii) no funds shall be disbursed from the Annual Social Contribution, if, in


the Company’s view, the disbursement of the funds or the project


supported by the funds would cause.the Company to be in violation of


applicable Law, including any applicable anti-corruption laws; (iv) funds


from the Annual Social Contribution may be disbursed (A) only for direct


delivery of services and community Infrastructure improvements, and not


to fund the general work programs of administrative offices or officials


save funding of customary and reasonable compensation and benefits for


the Committee’s administrative assistant and of reasonable amount for


basic office supplies, and (B) except as provided in Exhibit 6, only for the


benefit of Liberian communities in the affected counties, provided, that


residents of Bomi County, Grand Cape Mount County, and Gbarpolu


County and any other County identified in the Pre-Feasibility Report or the


Feasibility Report as being directly impacted by Operations shall be the


primary beneficiaries. Projects supported with funds from the Annual


Social Contribution and the actual *8isbursements from the Annual Social


Contributions shall be publicly disclosed and shall be subject to the same


audit procedures provided for expenditures by the Government of Liberia


and as may be further provided by Law. Periodic reports and audit reports


shall be made available to the Company and to the public and the


Company shall have the right to independently audit (at its own expense)


any disbursement or expenditure made or project supported with funds


from the Annual Social Contribution and for this purpose shall be provided


with and have access to all relevant documentation and information.





SECTION 9 PUBLIC HEALTH AND SAFETY


9.1 Safety Procedures and Notifications.





In connection with Operations, the Company shall install, maintain and use such


modern health and safety tjpvices, work gears and equipment, and shall practice


such modern health and safety procedures and precautions (including regular


safety training instruction for its employees) as are in accordance with applicable


Law and International Mining Standards. The Company shall notify the


Government promptly of any death of or serious injury to any employee of the


Company or any of its contractors or any other persons that occurs as a result of


Operations. For the purposes of this Section 9, a serious injury means an injury


that is likely to cause (he injured Person to lose five or more working days.


9.2 Security.





(a) The Company may, directly or by contract with a responsible provider of





security services, establish, manage and maintain its own asset and


employee security and protection service for the purpose of maintaining





law', order and security in the Exploration Area, in each Proposed


Production Area or in each Production Area and in the immediate vicinity


of other locations at which Company has or maintains property and assets


through its own security force and to do so always being subject (o


applicable Law (including all Laws relating to apprehension and detention


and human rights) and the “Voluntary Principles on Security and Human





0 N )


x 1


Rights” (as of October 2009 located at:


http://www,voluntarvDrinciDles.ore). provided that if at any time during


the Term the foregoing principles are no longer published on the Internet,


the last available published form shall apply to this Section 9.2(a) unless


and until the parties agreed upon an alternative set of principles to be


applied. Those members of the Company’s (or such contractor’s) security


services as being certified by the Ministry of Justice as being literate, as


having received training in police and law enforcement procedures given


by an outside contractor (which contractor has been certified by the


Ministry of Justice) and as having been provided with operating manuals


approved by the Ministry of Justice shall have enforcement powers within


the areas described in the preceding sentence, always being subject to


applicable Law.


The Company’s security services will have (i) the power of apprehension


and detention in accordance with applicable Law, and (ji) ihe power, to the


extent permitted by applicable Law, to search and exclude or evict


unauthorized Persons from ihe areas described in Section 9.2(a). If any


person is detained by the Company’s security services, the appropriate


Government authority shall be notified immediately, and the person


detained shall be handed over to such authority as soon as practical and in


no case later than the earlier of 24 hours from the time of detention and


when requested by Liberian National Police. The Company’s security


services may not use unreasonable force in detaining, excluding or


evicting persons, whatever the nature of their intrusion, and any detention


facilities shall be adequately ventilated, reasonably clean and with access


to sanitary toilet facilities. In addition to the foregoing requirements, any


security services provided by the Company in the Port or any new port,


whether directly or through a contractor, shall comply with the


International Code for the Security of Ships and Port Facilities (the “ISPS


Code”) and any port facility security plan adopted thereunder with respect


to the Port or any new port at which the Company conducts its Operations.


In accordance therewith, (he Company shall immediately notify the port


police of any security incident (within the meaning of the ISPS) and turn


over to the port police any person suspected of engaging in or threatening


to engage in a security incident who is detained by the Company or its


security services.


The Company shall coordinate the activities of the Company security


services, or to the extent that a contractor provides such security services


to the Company, the Company shall procure that such contractor shall


coordinate with the Government’s police and law enforcement authorities


and report (or procure that the relevant contractor reports) quarterly to the


Minister of Justice (with a copy to the Minister) on the activities of the


Company’s or its contractor’s security services (as applicable), including


numbers of persons detained and excluded or evicted, the reason for, the


place of and the period of any detention, and the disposition of each


detained person, provided that where the Company’s or its contractor’s


security sendees have detained any person, the Company or its contractor


(as applicable) shall report to the Minister of Justice (with a copy to the


Minister) as soon as practicable and in any event within a month of the


relevant detention. Each such report shall be certified by the chief


executive officer of the Company (or by the equivalent person within the


contractor, as applicable) as being true and correct.





(d) The Company is and shall be fully responsible for the compliance of the


members of its security force, whether its employees or the employees of a


contractor, with all requirements of this Section 9.2 and for all


consequences of any breach of those requirements.


9.3 Employee Housing.





The Company shall, either directly or indirectly, ensure access to housing for the


employees of the Company and their resident spouses and resident dependent


children (up to the age of 21) and shall ensure that such housing conforms to


minimum standards as agreed between the Government and the Company


including ensuring those requirements set out in Sections 9.4 to 9.6.





9.4 Sanitation.


Access to housing under Section 9.3, will include provision for bathroom facilities


with a toilet, sink and shower located in each house. The Company shall also


provide clean and accessible toilet (and, where the nature of the work makes it


appropriate shower) facilities at its workplaces.


9.5 Water Supply; Clean and Safe Drinking Water.





Access to housing under Section 9.3, will include provision for a clean and sale


pipe-borne water system for all houses. In addition, the Company shall construct


hand pumps or other sources of water at its workplaces that ensure a convenient


and uninterrupted supply ol'clean and safe drinking water. All drinking water


shall meet or exceed the approved Government standards for drinking water


quality.


9.6 Size of Houses.





Each family house will have separate bedrooms for parents and children, and, in


addition separate bedrooms for male children and female children, i.c. a minimum


of 2 or 3 bedrooms.





SECTION 10 MEDICAL CARE


Upon the commencement of construction of any Mine, Mining Plant or Infrastructure, the





Company shall construct or cause to be constructed, and during the period that a Mining


License is in effect under this Agreement the Company shall maintain and operate or


cause to be operated, health facilities to ensure the availability in each Production Area of


medical treatment, care and attention in accordance with applicable Law, and such other


improved standards as may be agreed between the parties. All such facilities shall be


staffed with qualified medical personnel and shall be properly equipped and supplied for


the level of service required in accordance with international medical standards. No later


than the commencement of Production, the Company shall have constructed or caused to








0 Os. ./


\ r. i \/-


be constructed and shall maintain, at the Company’s primary Mining location, a hospital


facility providing a wide range of curative and preventative services supported by a small


laboratory and meeting all standards under applicable Law. Such treatment, care and


attention shall be free of charge for the Company’s employees and their resident spouses


and resident dependent children up to the age of 21. Government officials and/or


employees assigned to and regularly employed in the Production Area in an official


capacity, and resident in or adjacent to the Production Area, and their resident spouses


and resident dependent children (up to the age of 21), shall, during the time of such


assignment, employment and residence, also be entitled to receive medical care on the


same basis as Company employees, provided that the Government agency which


represents each such Government official or employee shall, at the time of the assignment


or regular employment, certify to the Company the names and full identification of the


Government official or employee, the resident spouses and resident dependent children


(up to the age of 21). The Company shall also provide reasonable access to such health


facilities to members of local communities for ambulatory or emergency care. It is


understood that “reasonable access” may include the imposition of fees that are


reasonable in light of the economic level of such communities, it being also understood


that such fees are unlikely to cover the cost of service.


SECTION II EMPLOYMENT, TRAINING AND EDUCATION


11.1 Employment.


(a) Employment practices of the Company shall conform to applicable labor .


practices Law and other applicable Law and the Company will require any


contractors or sub-contractors to comply with this provision with respect to


their own employment practices.


(b) None of the Company nor any other contractor or sub-contractor may hire


individuals who arc not citizens of Liberia for unskilled labor positions.


(c) The Company shall (and the Company will require any other contractors


or sub-contractors to) employ and give preference to the employment of


qualified citizens of Liberia for financial, accounting, technical,


administrative, supervisory, managerial and executive positions and other


skilled positions as and when such positions become available unless and


to the extent that such competent and suitably qualified citizens arc not


available for such positions, it being the objective of the parties as soon as


is practicable that the Operations under this Agreement should be


conducted and managed primarily by citizens of Liberia.


(d) In furtherance of the obligations under Section 11.1(c), the Government


and the Company shall agree prior to the approval of the Feasibility Report


on progressive implementation of an employment schedule with the


objective of citizens of Liberia holding at least 30% of all management


positions including 30% of its ten most senior positions within five years


of the initial grant to the Company of a Mining License under this


Agreement, anil at least 70% of all management positions including 70%


of its ten most senior positions within ten years of such date. Appointment


of a citizen of Liberia to a particular position does not preclude subsequent


employment of a citizen of another country- in such position and it shall, at


a-.1. '.)c uuj Company's reasonable judg.-acu as to whether a Person


is suitably qualified for a particular position, having regard to all relevant


criteria, including such Person’s skills and training and any health and


safety considerations.


(e) Subject to the above, the Company may at all times choose its employees


and shall be free to employ such Persons who are not citizens of Liberia as


are required for the efficient conduct of Operations in Liberia. Where


applicable Law stipulates minimum technical qualifications and/ or


minimum levels of competence for any technical post, the Government


undertakes to recognize equivalent technical qualifications and/or


certificates of competency held by Persons who are not citizens of Liberia,


provided that such qualifications and/or certificates of competency shall


have been issued by a recognized institution or statutory authority in any


other country having a substantial mining industry or internationally


recognized mining education institution.


1.2 Training of Liberians.


(a) Following the grant to the Company of a Mining License under this


Agreement, the Company shall provide on a continuing basis for the


training of citizens of Liberia in order to qualify them for financial,


accounting, supervisory, managerial, executive positions and other skilled


positions, and as required by Operations provide on-the-job training,


operate vocational training facilities, and utilize whatever other measures


are" necessary and reasonable to transfer to other citizen employees the


ability to work in skilled trades and to supervise other tradesmen and


laborers.


(b) The Company shall facilitate the qualification of a Liberian geologist


under international resource reporting codes but shall not be required to


guarantee employment after training. The Government shall provide the


Company with a list of potential candidates for iron ore Competent Person


(CP) status accreditation under CRIRSCO guidelines. The Company shall


continue to hire and train Liberian geologists, including funding their


CRIRSCO accreditation as and when they qualify. The Company shall


furthermore facilitate applications by its own Liberian geologist employees


for accreditation and subsequent registration under CRIRSCO guidelines


as iron ore Competent Persons.


(c) The Company shall also provide for the following:


(i) Training of a high-calibre Liberian technical professional to


assume the role of Company Site Manager within 5 years from the


Effective Date;


(ii) Training of a high-calibre Liberian caterer or chef to assume the


role of Company Catering Manager ai the Site within 5 years from


the Effective Date;














65


(iii) Engagement of an international security services consultant to


provide training to the Company’s Liberian security contractor in


security risk evaluation and mitigation, and the preparation of


emergency plans;


(iv) Engagement of an international medical services provider to train a


Liberian nurse employed by the Company at its first aid post


health;


(v) Training of Liberians from surrounding villages in various


exploration support infrastructure functions; and


(vi) Regular training in defensive driving techniques for Company


drivers, who will also benefit from regular first aid training from


the Company’s international medical services provider.


11.3 General Education Funding,





(a) The Company shall, commencing on the Effective Date until the award of


a Mining License, contribute annually on the anniversary of the Effective


Date through a Company administered program a total of Two Hundred


Thousand Dollars (US$200,000) (adjusted annually for inflation in the


manner provided for in Section 11.3(b)) to education funding to be


allocated as follows: (i) US$80,000 (Eighty Thousand Dollars) per year (as


adjusted for inflation) towards geology or mining engineering scholarships


at the University of Liberia and technical apprenticeships at the University


of Liberia educational establishments, with such scholarships and


apprenticeships preferably awarded to students from Bomi, Grand Cape


Mount, and Gbarpolu Counties, (n) US$40,000 (Forty Thousand Dollars)


per year (as adjusted for inflation) towards the creation and operation of a


Mining and Geology' Institute at the University of Liberia for students


rpajoring in mining engineering and geology, (iii) US$20,000 (Twenty


Thousand Dollars) per year (as adjusted for inflation) towards the


promotion of graduate training programs in Geology and Mining


Engineering or other related disciplines at the University of Liberia or such


other state operated higher education institutions, and (iv) US$60,000


(Sixty Thousand Dollars) per year (as adjusted for inflation) towards the


facilitation of graduate training of and sponsor exchange programs for


students majoring in mining engineering and geology, with preference for


students from Bomi, Grand Cape Mount, and Gbarpolu Counties, in


universities in other parts of the world (it being understood that such


programs should be structured to provide reasonable incentive for such


employees to return to Liberia on completion of their training). Following


the grant of a Mining License to the Company under this Agreement, the


Company shall increase the total annual contribution to the inflation


adjusted equivalent of US$500,000 (Five Hundred Thousand Dollars),


which shall be payable on the anniversary of the Effective Date for the


remainder of the Term and shall be allocated for the purposes described in


the foregoing sentence in the same proportions provided therein. The


inflation adjustment shali account for the change in the Deflator between


the Effective Date and the date of issuance of the Mining License. This


 amount witi in turn bo adjusted annually for inllation in the manner


provided for in Section 11.3(b)).


(b) The amounts payable pursuant to Section 11.3 (a) shall be adjusted


annually for inflation for each payment after the initial payment in


proportion to the change in Deflator over the year ending on the last day of


the month immediately prior to the due date of each payment. The


Government’s determination of such amount shall be final, absent manifest


error.


(c) The amount referred to in clause (n) of Section 11.3(a) shall be paid to the





general revenue account of the Government and earmarked for the


University of Liberia. The Company’s obligations under clause (iv) of


Section 11.3(a) shall include, but are not limited to, the funding up to the


amount provided in clause (iv) in each year (commencing in the year the


first Milting License is granted) of the expenses of at least one Liberian


citizen in a recognized graduate school for a master’s degree or the


equivalent in geology, mining engineering, or a related field. The


Company may condition such funding on an agreement of the student to


work for the Company, an Affiliate of the Company or an Affiliate of a


shareholder of the Company upon graduation.


(d) The Company will, directly or indirectly in conjunction with the Ministry





of Education, ensure that there is available free primary and secondary


education (K-12) to the resident dependent children (up to the age of 21)


of the Company’s employees and of Government officials' and/or


employees assigned to and regularly employed in a Production Area in an


official capacity and who are resident in or adjacent to such Production


Area.





11.4 Scientific Research Fund.





f


The Company shall also make an annual contribution to the Scientific Research


Fund of One Hundred Thousand Dollars (US $100,000 (adjusted annually for


inflation in the manner provided for in Section 11.3(b)), commencing on the


Effective Date and payable thereafter on the anniversary of the Effective Date,


through the Term. Such amount shall be adjusted annually for inflation in the


manner provided in Section 11.3(b) and shall be paid into the general revenue


account of the Government for the Scientific Research Fund.


11.5 Audit Rights.





The Company shall have the right to independently audit (at its own expense) the


use of any contributions made pursuant to Sections 11.3(a) and (c) or Section 11.4


and for this purpose shall be provided with and have access to all relevant


documentation and information, The Company shall not be required to make any


contribution under Sections 11.3 and 11.4 that, in its view, would cause the


Company to be in violation of applicable Law including applicable anti-corruption


laws.











i *


67


 SECTION 12 USE OF LIBERIAN GOODS AND SERVICES





When purchasing goods and services related to Operations, the Company shall, and shall


cause its Major Contractors, and will use reasonable efforts to encourage its other


contractors, to, (i) organize their procurement practices to give meaningful opportunities


to bid for contracts to those entitled to preference pursuant to clause (ii) of this sentence,


and (ii) give preference to the maximum extent possible to materials and goods produced


in Liberia and services provided by natural persons who are citizens of Liberia resident in


Liberia or entities incorporated or formed in Liberia where natural persons who are


citizens of Liberia resident in Liberia are entitled to receive 60% or more of ail profits


from such entities, unless such materials or goods are not provided in Liberia or such


services are not provided by Liberian persons. Subject to the foregoing, the Company


and its contractors may freely contract with any Person. The Company must report to the


Minister within 60 days following the end of each Financial Year on the extent to which


the Company and its Major Contractors acquired during such year materials, goods and


services from the preferred sources described in the first sentence of this Section 12.' A


“Major Contractor” is a contractor or a subcontractor who received more than


US$200,000 directly or indirectly from the Company in the relevant Financial Year and


who had significant operations in Liberia in that Financial Year. Merely maintaining a


representative office, or the mere presence of supervisory personnel to inspect or direct


work performed by other contractors, do not constitute “significant operations” for the


purposes of this Section 12.


SECTION 13 ENVIRONMENTAL PROTECTION AND MANAGEMENT


•13.1 The Company’s Duty.


The environmental responsibilities of the Company during Exploration arc as set


forth in the Exploration Regulations (as modified by this Agreement). Following


the gram of a Mining License to the Company, the Company shall conduct its


Operations in accordance with Sections 8.1 through 8.3 of the Mining Law,


applicable Law, the World Bank/IFC Environmental Health and Safety Guidelines


for Mining, the IFC Performance Standards on Environmental and Social


Sustainability, the approved EMP.and this Agreement. The Company shall in any


event take appropriate preventive measures to protect all streams and water bodies


within or bordering Liberia, all dry land surfaces, and the atmosphere from


pollution, contamination or damage resulting from Operations. If Operations


violate any requirement referred to in the two previous sentences or otherwise


have material adverse impact on the environment, the Company shall proceed


diligently to restore the environment as much as possible to its original and natural


state (or to remediate the negative impact where restoration is impractical) and


shall take appropriate preventive measures to avoid further material adverse


impact on the environment.


13.2 Environmental Reports and Audits.


(a) The Company shall deliver to the Minister, within 60 days after each


anniversary of the date of the issue of the Mining License, an


environmental report prepared by the Company which shall include an


assessment of the Production Areas under such license plus all areas


outside oi the Production Areas in which the Company conducts


Operations.


(b) The Company shall deliver to the Minister (i) once every two years


commencing with the second anniversary of the submission of the first


environmental report pursuant to Section 13.2(a) and (ii) on the last day of


the Mining Term, an environmental audit and assessment of the


Production Areas under such license plus all areas outside of the


Production Areas in which the Company conducts Operations, The audit


shall be performed or supervised by an environmental consultant who is


not a regular employee of the Company or an Affiliate of the Company


and vvho is a registered engineer or scientist with at least ten years of


experience in making environmental compliance assessments and audits in


the mining industry, the identity of whom is agreed with the Minister. The


audit and assessment are for the purpose of determining whether


Operations since the beginning of the relevant period that is the subject of


the audit are being conducted ia-conformily with applicable environmental


Law and the other requirements of this Agreement and the Company's


approved BMP. Such audit and assessment wall also include an


assessment of the status of the Company’s provision for restoration or


remediation of the Production Areas and such other areas in which the


Company conducts or has conducted Operations and its conformity with


the requirements of the approved BMP. The audit and assessment will


also include a full accounting for all changes during such relevant period


in the balance of any account established pursuant to the approved EMP to


fund such restoration and remediation. If any .such audit and assessment


for any relevant period identifies any failure to comply with the


requirements of Section 13.1 or the EMP, the Company shall promptly


remedy such situation at its own expense.


! 3.3 Government Environmental Inspections.


The Minister or the F.pX may conduct, at its own expense, periodic inspections of


Exploration Areas, Production Areas and other areas in which the Company


conducts Operations following receipt by the Company of at least two Business


Days’ prior written notice of such inspection, provided (hat no prior written notice


is required where the inspection relates to a concern regarding employee health


and safety or a negative environmental impact. As a condition to permitting such


inspection, the Company may require (i) receipt of a copy of written instructions


to conduct such inspection from an official senior to the official purporting to


conduct the inspection, manually and legibly signed on the letterhead of the


relevant ministry or Government agency, and (ii) viewing and copying the


identification of the persons claiming the right to conduct such inspection.


13.4 Updating the EIA and the EMP.


(a) The Company shall periodically (not less frequently than every four years,


or as may otherwise be required by applicable Law) update the EIA and


the EMP to reflect the actual status of Operations at the lime and updated


risk assessments generally applicable with respect to Operations or Mine











69


ctosurc, and updated estimates ol' the oust of carrying out the closure


management plan.


(b) The Company shall also update the EIA and the BMP as a condition to


making any material changes in Operations, or any Mine, Mining Plant or


Infrastructure. The updated EIA and EMP (including an updated closure


management plan and budget) are to be submitted to and are subject to the


review and approval of the EPA in accordance with then-applicable


environmental Law, such approval not to be unreasonably withheld or


delayed. As a condition of approval, the Minister or the EPA may require


additional funding to be provided or secured in accordance with the agreed


funding scheme pursuant to Section 5.7(c) if such action is required to


assure adequate and secure funding of estimated closure costs. The


Company shall in any event comply with its undertakings contained in the


most recently approved EIA and EMP.


13.5 Scope of Duty to Cease Operations during Remediation.


Any environmental remediation required by applicable Law or this Agreement to


occur during the Mining Term shall not require the Company to cease Operations


during the restoration or remediation period (except to (he extent necessary to


carry out such restoration or remediation) so long as the Company is proceeding


diligently to undertake the required restoration or remediation and has ceased any


activities that constituted a violation of applicable Law or a breach of the


obligations of the Company under Section 13.1. This Section does not limit (he


right of the Minister to suspend Operations under Section 24 when Operations are


causing a material adverse impact on the environment.


13.6 Ho Liability for Previous Negative Environmental Impact.


(a) The Company shall assume no liability for and shall have no liability to


any third party for any negative environmental impact within any part of


an Exploration Area, Production Area or any other area in which the


Company is conducting Operations in existence prior to commencement of


any Exploration or other Operations or resulting from ihe acts or omissions


by parties other than the Company or its Affiliates prior to commencement


of any Exploration or other Operations (“Previous Negative Environmental


Impact”).


(b) The Government shall indemnify and hold harmless the Company from


any losses and liability incurred by it resulting from any claims made


against the Company by third parties which have arisen in connection with


Previous Negative Environmental Impact in respect of Land owned by the


Government which it has made available to the Company for the purposes


of Operations (excluding any Land that is made available to the Company


pursuant to the exercise by the Government of its powers of eminent


domain pursuant to Section 7.3), provided that:


(i) the Company shall notify the Minister of Justice promptly of any


suit, action, proceedings, claims, investigations and negotiations


 \ .


made against the Company in respect of this Section 13.6 (a "Third


Party Company Claim”'):


(ii> the Company shall have the right to conduct all suits, actions,


proceedings, claims, investigations and negotiations relating to any


matter referred to in this Section 13.6; and


(iii) in the conduct of any Third Party Company Claim, the Company


shall:


(A) if so required by the Government, take all such steps or


proceedings as the Government may reasonably require


including steps to avoid, dispute, resist, mitigate,


compromise, defend or appeal against any such Third Party


Company Claim (provided that such steps or proceedings


shall be taken at the Government's cost and expense);


(B) provide the Government with all such information and


reports concerning any such Third Party Company Claim


and any steps or proceedings taken by the Company as the


Government may from time to time reasonably request; and


(C) not agree to settle and/or settle any such Third Party


Company Claim without prior written consent of the


Government (such consent not to be unreasonably


withheld).


SECTION 14 TAXATION


14.1 Law of General Applicability.


The Company shall pay all Taxes and Duties and conform to all procedures


t pursuant to applicable Law except as may otherwise be provided in this


Agreement.


14.2 Fiscal Regime.


(a) Exhibit 3 to this Agreement sets forth certain modifications to the Revenue


Code. The modifications set out in Exhibit 3 shall be read in conjunction


with the Revenue Code as if such modifications were in force and


constituted applicable Law for the purpose of determining the liabilities of


the Company under the Revenue Code. The Revenue Code as it would


read were such modifications in force and constituted applicable Law is


herein called the “Agreed Revenue Code”. The Agreed Revenue Code


shall apply to the Operations during the Term and the Company shall be


bound by all the provisions thereof, except to the extent that the provisions


of this Agreement vary the provisions of the Agreed Revenue Code.





(b) The Government hereby agrees that with respect to those items set out in


Section 17 of the Agreed Revenue Code and subject to the limitations


(herein, the applicable Taxes and Duties shall be stabilized as of the











71


V •. 7








Effective Date for the period equal to the lesser of the Term or 15 years


provided that such Taxes and Duties may be subject to adjustment as a


result of periodic review of those items every five years, if the Company


and the Government mutually agree on any such adjustments as provided


in Section 31.2. After the Effective date, should the Government reduce


the applicable Taxes and Duties below those applicable to the Company


then the Company will become entitled to such reductions upon


providing notice to the Minister of Finance.


(c) From the Effective Date until the expiry of two (2) years following Start


of Commercial Production with respect to the Production Area related to


each Mining License, the Company shall be exempt from all import


duties, and excise charges, but shall be subject to the payment of a


Customs User Fee, on all modules, plants, equipment, construction


material, machinery, and heavy vehicles, capital spare parts, raw


materials (other than gasoline and gas oil), and intermediate inputs, all of


which are specified in Exhibit 7, for use in a Production Area as to which


such period shall not have expired.


(d) The Company shall pay a Customs User Fee not exceeding 1.5 percent


(1.5%) of the C1F Liberian Port value of imported goods or


US$10,000,00 per item, which ever is less, in accordance with the


Agreed Revenue Code, in respect of all items that arc exempted from the


import duty as provided for in Section 14.2(c), all of which items are


specified on Exhibit 7 hereto. For the avoidance of doubt, the Company


shall not pay any Customs User Fee in respect of any goods which are


subject to import duty but will be subject to inspection fees in


accordance with Section 16.3. The Company shall not be required to pay


any Customs User Fee in respect of any goods on export of such goods


but will be subject to inspection fees, where applicable, in accordance


with Section 16.3.


(e) Sections 14.2 (c) and (d) shall apply to the Company’s contractors and


their subcontractors to the extent that such contractors and


subcontractors arc exclusively rendering goods or services to the


Company in relation to its Operations or importing goods in connection


with the Operations; provided that any such goods or services are


identified as goods or services exclusively relating to the Operations.


14.3 Withholding Tax.





(a) In the case of a transfer of an interest in the Company, the Company or


any transferor of such interest shall pay a withholding tax to the


Government of fifteen 15 percent of the value of all cash and other


consideration received directly or indirectly by the transferor or any


other entity with respect to such transfer in accordance with the Law of


general application within ten (10) days after the last day of the calendar


month in which such transfer shall have occurred.





(b) The payment of withholding lax referred to in paragraph (a) above shall


be accompanied by documentation of all amounts and the value of any


a \-





 consideration paid with respect to such transfer and such other


reasonable documentation as the Ministry of Finance may require. Such


documentation shall be certified as true, correct, and complete by the


chief executive officer and the chief financial officer of each of the


transferors and transferees of any interest.





(c) The Shareholders and Sesa Goa acknowledge that the sale of an equity


interest in Western Cluster to Bloom on or prior to the date hereof, and


the payment therefor on or prior to the Effective Date, shall require


payment of withholding tax to the Government in accordance with this


Section 14.3. Bloom agrees that it shall withhold 15% of the


consideration payable to Elenilto in the amount of US$13,500,000


(Thirteen Million Five Hundred Thousand Dollars) for the purchase of


51% of the outstanding shares of capital stock of the Company, which is


US$90,000,000 (Ninety Million Dollars), and remit such amount to the


Government directly from the escrow account by JPMorgan in


accordance with applicable procedures and accompanied by the


applicable documentation provided above and by applicable Law,


promptly following certification by the Minister of Justice that this


Agreement has been ratified by the National Legislature. Following the


issuance of the release notices (Exhibits ---11A and 11B), sent by the


Minister of Justice to JPMorgan London, the withholding tax of


US$13,500,000 (Thirteen Million Five Hundred Thousand United States


. Dollars) shall be transferred directly to the general revenue account of


the Government of Liberia. Elenilto and Sesa Goa shall be liable to pay


such withholding tax to the extent Bloom does not withhold such amount


and remit it to the Government.











(d) No transfer of any interest shall be effective until such documents have


been delivered and such withholding tax is paid; provided that the


transfer of shaves in Western Cluster to Bloom described in Section


14.3(c) shall be deemed to be effective at such time as the necessary


withholding tax and applicable documents are deposited with an escrow


agent to be held and applied in accordance with instructions acceptable


to the Government.





SECTION 15 ROYALTIES, DETERMINATION OF FAIR MARKET


VALUE, EXPORT SALES PRICE





15.1 Royalties.





(a) The Company shall pay the Government a royalty of 4.5 percent (the


“Royalty Rale'-) multiplied by the fair market value determined in


accordance with Section 703 the Revenue Code, (such payment


collectively, the “Royalty”).





(b) lhe Royalty shall be paid to the general revenue account of the


Government in Dollars on the date of shipment in respect of which


payment ol'a Royalty is to be made. At the time of making such payment,





ft x~i





77


the Gompany shall provide the Ministry of Finance with a statement


showing the manner of computation of the Royalties due in such detail as


the Ministry of Finance may require by regulation or otherwise.


15.2 Fair Market Value, the Sales Price; Computation of Gross Income.


fhe fair market value f.o.b. Liberia for purposes of Section 703 of the Revenue


Code and the sales price for computing gross revenue for purposes of Section 201


of the Revenue Code shall be:


(a) in (he case of a sale to a non-Affiliate f.o.b. Liberia, the actual sales price


paid or payable f.o.b. Liberia, and


(b) in the case of a sale to an Affiliate f.o.b. Liberia in connection with a back-


to-back sale by the Affiliate to a non-Affiliate f.o.b. Liberia, the actual


sales price paid or payable f.o.b. Liberia to the Affiliate by the non-


Affiliate.


In ail other cases the fair market value for purposes of Section 703 of the Revenue


Code and the transfer price for transactions between Related Persons provided for


in Section 713 of the Revenue Code (such transfer price to be used for computing


gross revenue for purposes of Section 201 of the Revenue Code) shall be


determined in accordance with the Pricing Agreement provided for in Section


15.3.


15.3 The Pricing Agreement.


(a) Prior to the approval of the Feasibility Report, the Government and the


Company shall enter into an agreement (the “Pricing Agreement”) which


shall set out the method for determining (i) the lair market value of each


Product consistent with the requirements of Section 703 of the Revenue


Code and (ii) the transfer price for each Product consistent with the


requirements of Section 713 of the Revenue Code. /


(b) Upon request from the Government, the Company shall deliver to the


Government:


(i) such documentation and information as may be required, pursuant


to the Revenue Code, of a taxpayer in connection with the


calculation of any Royalties payable; and


(ii) such other information requested by the Government that is


reasonably relevant to the determination of the fair market value or


transfer price for each Product,


(c) If either party in good faith believes that the values for the fair market


value or the transfer price of any Product determined pursuant to the


Pricing Agreement are no longer consistent with the requirements of


Sections 703 and 713, respectively of the Revenue Code, the parties will


seek to agree upon a revised Pricing Agreement.





'• 1





hi


(u; railing agreement between the parties on. a Pricing Agreement for


determining the fair market value or the transfer price or any revisions


thereto, such matters shall be determined by a single arbitrator as provided


by Section 27.5, such arbitrator to be a recognized expert in the pricing of


Iron Ore. The Pricing Agreement and any decision by an arbitrator if such


is required shall be public and shall be posted by the Government


electronically or through such other means as may be provided by


regulation and shall be attached to this Agreement as Exhibit 4,


SECTION 16 OTHER PAYMENTS TO THE GOVERNMENT


16.1 Processing and Delay Tees.


All fees in connection with Exploration shall be in the amount and paid as


provided in the Exploration Regulations. The following additional processing


fees apply under this Agreement. No action will be taken with respect to any


filing or application referred to in any Section of this Agreement requiring the


payment of a processing fee with the application until the Minister receives


confirmation that the relevant fee has been paid. No approval or consent requiring


the payment of a fee upon the granting of such approval or consent will be


effective until the Minister receives confirmation that the relevant fee has been


paid.


The processing fee for the fling of a notice designating one or more Proposed


Production Areas and the accompanying Mining License application is


US$10,000 per Proposed Production Area, payable on tiling of the notice.


(a) The processing fee for the fling of a Feasibility Report is US$10,000.


payable on fling of the Feasibility Report.


(b) The fee for a six month extension of the time to designate Proposed


Production Areas pursuant to clause (i) of Section 5.3(a) is US$15,000,


payable on filing of the notice of extension.


(c) The fee for a six month extension of the time to file a Feasibility Report


pursuant to clause (ii) of Section 5.3(a) is US$100,000, payable on filing


of the notice of extension.


(d) The processing fee for an application to postpone development under


Section 5.4 is US$500,000, payable on filing of the application.


(e) The processing fee for an application to modify or amend a Feasibility


Report is USS 10,000, payable on filing of the application.


(t) The processing fee in connection with an application for a consent


required under Section 23 is US$10,000, payable on filing of the request


for consent.


16.2 ECOWAS Trade Lew.


Notwithstanding any general exemption from import duties applicable to the


Company under the Revenue Code or this Agreement, the Company shall be


subject to the ECOWAS Trade Levy on all goods from non-fiCOWAS states


which it imports into Liberia at the rate established by applicable Law.


16.3 Inspection Fees.


The Company shall be subject to inspection on all imports and exports. If at any


time the Government does not itself provide inspection services, the Company


shall utilize the services of the inspection entities approved by the Minister of


Finance at rates to be negotiated between the Company and the designated


inspection agency. Where the Government does provide such inspection services,


the Company shall pay such inspection fees to the Government as are in effect


from time to time under applicable Law.


16.4 Regulatory Fees.


The Company shall pay such Taxes and Duties as arc generally applicable under


Law in Liberia with respect to driver's licenses, vehicle registrations, corporate


registration, residency and work permits and other license, registrations and


permits incidental to doing business or conducting activities in Liberia.


16.5 Mineral Development and Research Fund.


Pursuant to Section 18.4 of the Mining Law, the Company shall make a one-time


contribution of US $50,000 to the Mineral Development Fund, payable on the


Effective Date. Such amount shall be paid into the general account-of-the


Ministry of Finance for the Mineral Development Fund.


16.6 Water Use Lew.


The Company shall be liable to the payment of a water use levy to be negotiated


between the parties in light of the requirements of the Company as set forth in the


Feasibility Report submitted pursuant to Section 5.6 and prior to the grant of a


Mining License under Section 5. f


16.7 Up-Front Payments.


The Company shall pay to the Government a fee of US$25,000,000 (the “Up-


Front Payment"), payable according to the following schedule:


(i) US$ 12.5 million within ten (10) days after the Effective Date; and


(ii) US$ 12.5 million within ninety (90) days after the first payment;


Such amounts shall be paid into the general revenue account of the Government.


SECTION 17 FINANCIAL REPORTING AND CURRENCY


17.1 Accounting and Tax Matters.


All of the Company ’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 Liberian Currency or in any other currency other than Dollars


oiviiS Ivi converted to Dollars in accordance with and pursuant to the financial


reporting standard adopted by the Company pursuant to the requirements of


Section 17.4 based upon the Prevailing Market Rate of Exchange of Dollars and


any such currency at the date of the applicable transaction.


17.2 Exchange Control-


The Company shall at all times have the right, without restriction or penalty,


directly or indirectly, to obtain, hold, deal w-ith, remit, receive and disburse funds


in such manner, currencies and places as it chooses in direct connection with its


Operations. Without prejudice to the generality of the foregoing, the Company


shall have the unrestricted and unencumbered right to sell and receive payment for


Product(s) in any currency and all proceeds therefrom may be deposited in bank


accounts outside of Liberia and held there or remitted therefrom to anywhere in


the world, in any currency. Notwithstanding the foregoing, (he Company shall


maintain at least one account with a bank or financial institution in Liberia. The


Company shall also have the right to acquire from, and sell to, any Person


currency that is legal lender in Liberia at the Prevailing Market Rate of Exchange


in direct connection w ith Operations.


17.3 Currency of Payments to the Government.


Except as otherwise expressly provided in this Agreement, payment of the


Company’s obligations to the Government under this Agreement, including


obligations for Taxes and Duties payable as a consequence of Operations, shall be


in Dollars. Any obligation originally stated in Liberian Currency shall be


converted to Dollars at the Prevailing Market Rate of Exchange. The Company


shall make payments of sums it collects on behalf of the Government, including,


but not limited to. Taxes withheld from the salaries or wages of its employees, and


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


applicable Law (as modified by this Agreement) to be withheld or retained by it


on behalf of the Government, in the currency in which such salaries or wages or


such other sums are paid. For the purposes of determining compliance by the


Company of required payments in Liberian Currency under any applicable Law


(including any Law determining minimum wages) the amount of any payment by


the Company made in Dollars shall be converted to Liberian Currency at the


Prevailing Market Rate of Exchange as of the date of payment.


17.4 Financial Statements and Audit.


(a) The Company shall deliver to the Government within 90 days after the end


of each Financial Year of the Company:


(i) a balance sheet of the Company as at the end of such year, and





(ii) statements of income, changes in shareholders’ equity and cash


flows of the Company for such year,


setting forth in each case in comparative form the figures for the previous


fiscal year, all in reasonable detail, and certified by the chief financial


officer of the Company as having been prepared in accordance with








77


generally accepted accounting principles in the United Slates (“GAAP”) or


generally accepted accounting principles as reflected in International


Financial Reporting Standards as in effect from time to time in the


European Union (“IFRS”), consistently applied except as otherwise noted.


(b) Such financial statements shall be accompanied by an opinion thereon of


independent public accountants of recognized international standing,


which opinion shall state that such financial statements present fairly, in all


material respects, the financial position of the companies being reported


upon and their results of operations and cash flows and have been prepared


in conformity with GAAP or IFRS, consistently applied except as


otherwise noted, that the examination of such accountants in connection


with such financial statements has been made in accordance with generally


accepted auditing standards, and that such audit provides a reasonable


basis for such opinion in the circumstances.


(c) Each year’s financial statements shall he accompanied by a certificate of


the chief financial officer of the Company to the effect that during the


Financial Year then ended the Company was in compliance with


(i) Section 20.3, (ii) Section 20.4 (setting forth in such certificate the value


of the ratio provided for in such Section as at the end of each quarter of


such Financial Year) and (ili) Section 20-7 (or setting forth the extent of


non-compliance at such time (if any) and the actions taken and being taken


to remedy such non-compliance), and has made all deposits or


contributions (if any) required by the closure management component of


the Company's approved EMP.


(d) Each year’s financial statements shall be accompanied by a listing of all


transactions with Affiliates and Related Persons of the Company reflected


in such financial statements, identifying the amount of the transaction, the


Affiliate or Related Person involved, and the nature of the transaction,


f certified by the chief financial officer of the Company as being correct and


complete. Transactions of the same type with the same entity that are


individually immaterial may be aggregated rather than separately listed.


The Company shall maintain contemporaneous documentation of each


such transaction with any such Affiliate or Related Person evidencing the


pricing of the transaction, including all documentation required by the


Revenue Code or any regulations issued thereunder.


(e) Each year’s financial statements shall be accompanied by certificate of the


chief financial officer of the Company to the effect that (i) with respect to


goods or services covered by any Pricing Agreement in effect during the


relevant period, the Company’s transfer prices during such year were


computed in accordance with the requirements of such Pricing Agreement


and (ii) with respect to goods or services sold or provided in a transaction


between the Company and an Affiliate or a Related Person of the


Company which are not covered by such Pricing Agreement, the prices


thereof imposed during the relevant period were computed in accordance


with Section 20.7.


 (0 If the Minister of Finance determines that it is necessary for it to cause an


independent review or audit the Company’s records or books, the


Company will cooperate to provide the Government with copies of the


information, books and records needed to complete the review or audit. If


the Government nonetheless deems it necessary for any part of such audit


to be performed outside of Liberia, the cost of associated travel will be


borne by the Government except to the extent that the Company is unable


to provide or procure the provisions of the information, books or records


needed to complete the audit in Liberia, in which case the Company shall


bear both the reasonable travel cost of a reasonable number of auditors


selected by the Minister of Finance to travel to the place where such


information, books and records may be obtained and their accommodation


costs for a reasonable amount of time necessary to complete their review.


The Government agrees that its requests for inspection of information,


books or records outside of Liberia shall be reasonable and the justification


thereof well-documented.





(g) Sections 6.1(i) and 11.1(c) of the Exploration Regulations or any


equivalent provision under applicable Law shall not apply to the


Company, which shall be entitled to keep consolidated books and records


in respect of its operations regardless of the number of Exploration


Licenses or Mining Licenses it has in effect.


17.5 Compliance with LEI'l'l.


The Company shall comply with requirements of the Liberian Extractive


Industries Transparency Initiative with respect to all payments to be made by it to


the Government,


SECTION 18 INCIDENTAL RIGHTS AND OTHER MATTERS


18. L Imports.


/


The Company may import and use directly for Operations, and subsequently


export, any and all machinery, equipment, vehicles, supplies, consumable items,


fuels, petroleum products, explosives and any other thing whatsoever reasonably


required with respect to Operations. The Company shall at all times comply with


applicable Law regarding the safe use, sale, disposal and security of fuels,


petroleum products, and explosives.


18.2 Taxes on Resale of Imported Items.


The Company may sell, in Liberia, all imported items that are no longer needed


for Operations, except that the Company may not sell explosives, gasoline or


diesel within Liberia to third parlies without the consent of the Government. If


such imported items were exempted in all or part from Taxes and Duties on


import into Liberia, then the Company shall upon their sale pay to the general


revenue account of the Government those Taxes and Duties payable on such items


under applicable Law in effect on the date of sale calculated on the basis of the


lair market value of such items on the date of sale as determined in accordance


with the Revenue Code and fulfill all formalities required by Law in connection


waii sucm saies; provided that the Company shall be entitled to export from


Liberia, exempt from all Taxes and Duties, any modules, plant, equipment,


construction material, machinery, and light and heavy vehicles, spare parts as well


as raw materials, intermediate inputs and consumables, including those items


referred to in Exhibit 7 to this Agreement, that were previously imported in


connection with the Operations which were exempt from any import tax.


18.3 Right to Export Minerals and Other Rights.


The Company (i) may, directly or through appropriate contractual arrangements,


market and sell (at arm’s length international market and competitive prices) the


Product(s) obtained from Operations during the Term of the relevant Mining


License to any Person in any country or state, subject in all cases to the provisions


of this Agreement, and (u) subject to its obligations to pay Royalty, Taxes and


Duties and other amounts due to the Government under this Agreement, may


receive all income and proceeds from such sales and deposit them in banks within


Liberia and outside of Liberia of its own choosing, provided that notice has been


given by the Company to the Central Bank of Liberia of its choice of external


bank and approval thereof by the Central Bank of Liberia has been obtained, if


such approval is required under applicable Law.


18.4 Dealership Licenses,


The Company is not entitled to acquire a dealership license under the Mining


Law. This, restriction does not bar an Affiliate of the Company from acquiring


such a license if the Affiliate does not purchase Minerals or Products from the


Company.


SECTION 19 ADDITIONAL UNDERTAKINGS OK THE GOVERNMENT


19.1 Access to Information


The Company is entitled to obtain access to geological or other information


relating to the Exploration Area that is owned by or subject to the control of the


Government in the manner and- to the extent provided in the Exploration


Regulations,


19.2 Provision of Documents.


Subject to Section 11.1 and except to the extent any such Person may be


disqualified by applicable Law, the Government shall promptly furnish to each


officer, director, employee and consultant of the Company, or of its Affiliates,


contractors and subcontractors, who is not a citizen of Liberia, and to the spouse


and minor children of each such Person, all documents and visas necessary to


enable such Person to enter and to leave, or travel within, the territory of Liberia.


19.3 Electricity Generation and Transmission.


(a) The Company shall provide in its Feasibility Report for the installation of


one or more Power Plants in order to meet the Company’s reasonable


needs for conducting Operations in Liberia and to comply with its


uuiigauoas umier Section L9..>(b), and in connection with the Power


Plants, to construct necessary Infrastructure, provided that any proposed


installation of hydropower capacity by the Company shall have the prior


approval of the Minister and may not be approved unless sized to utilize


(he optimal energy potential of the hydropower resources involved, as


reasonably determined by the Minister after consultation with


internationally recognized hydropower consultants. In al! cases, the


Company will be subject to, and agrees to comply with, the requirements


of any applicable Law regulating the manner in which any such facilities


shall be constructed, operated, maintained, repaired or expanded for the


safety of the public or protection of the environment. Nothing herein shall


be deemed to authorize the Company to construct any Power Plant within


the Port or any new port constructed by the Company.


(b) The parties acknowledge that, in the event the Company constructs a





Power Plant al any of its mining sites, such Power Plant shall be designed


to generate a quantity of electric energy in excess of the electric energy


required by the Company for Operations to supply third party users located


within a ] 0 km radius thereof on a 7 days per week, 24 hours per days


basis in accordance with third party user demand from time to time,


provided that the Company shall not be required to build a Power Plant in


a manner that it generates an excess of more than 10% over the electric


energy required by it for Operations; and further provided, that the


Company shall only be obligated to provide the power at the gates of.any


Power Plant and interconnection between the third party consumers and


the Power Plant and the distribution of the electricity shall be done on the


Government's infrastructure. The Company may charge third party users


rates at market price for their power usage. The Company shall provide


electric power free of charge to Government agencies in the 10 km radius


area surrounding any Power Plant; provided that the Government be


responsible for and pay the costs associated with interconnection and


distribution ojfrom such Power Plant to such Government agencies.





(c) To (ho extent that the electrical energy generated by a Power Plant is used


by the Company in connection with Operations or is (with respect to


excess energy only) sold to third parties in the manner provided in Section


19.3(b), the Company shall have no liability for any franchise, license or


similar fees otherwise imposed by applicable Law on or in connection with


die generation or transmission of electricity. AH sales to third parties will


be subject to any applicable taxes or fees imposed by applicable Law


relating to the sale of electricity, including any service tax, and the


Company shall be entitled to recover from such third parties an amount


equal to the amount any such taxes or fees to the extent assessed against


the Company.





(d) Any Power Plant shall also be designed and constructed so that it can be


expanded on a commercially feasible basis to have twice the electricity


generating capacity necessary to service Operations.


(e) As an alternative to Company constructing a Power Plant, the Company





shall also provide in its Feasibility Report for the purchase of power from





7


81 \ . /


Liic Government, including from one or more Government-owned


hydropower projects to be located on the St. Pau! River, and any


Infrastructure necessary to interconnect the Company’s facilities with such


Government-owned power projects, which Infrastructure shall be


constructed by the Company. It is understood that the Company shall have


no responsibility to conduct or fund a feasibility study for development of


Government-owned hydropower project.


19.4 Communications Facilities. Systems and Frequencies.


The Government will use its reasonable efforts to facilitate:


(a) the receipt by the Company from the Government of such rights, licenses,


registrations, permits and other authorizations as may be required by


applicable Law in connection with the possession, use, importation or


purchase of such communications systems as are necessary for internal


communications, including radio, telecommunications, electronic mail


systems, satellite networks, cellular systems, microwave devices and other


communications devices and systems subject to the compliance by the


Company with the requirements of applicable Law in connection with the


receipt of such rights, licenses, registrations, permits and other


authorizations; and


(b) to the extent available from the Government, and as approved by the


Liberian Telecommunications Authority (LTA), the obtaining by the


Company of the right to utilize, at generally available rates, of such


number of broadcast and communications frequencies for domestic and


international use as may reasonably be required for Operations; provided


that the frequencies used by the Company within the Port or any other port


shall be subject to approval by the National Port Authority to avoid


interference with other communications uses.


19.5 Right to Water.





The Company shall have the right to access (including by means of extraction)


such water supplies as arc reasonably required by it for the purposes of carrying


out its Operations subject to the payment by the Company of any charges required


by applicable Law for the use of water and provided that such access by the


Company does not affect the water supplies used by the surrounding population


or, to the extent it does so affect water supplies, the Company provides an


alternative source of water supply to the affected population.


19.6 Peaceful Enjoyment.





The Government hereby warrants and defends the Company’s title to, possession


and peaceful enjoyment of, all rights granted to it by the Government under this


Agreement, including its right to all Land and property in Liberia in accordance


with applicable Law, provided, that the Government shall have no obligations


with respect to any claims that may arise out of rights of third parties with respect


to Land as to which the Company has acquired rights pursuant to Section 7.1 or


Section 7.3(a).


 19.7 Expropriation and Non-Discrimination.





Subject to Article 24 of the Constitution of Liberia, the Government undertakes


that it shall not, by direct or indirect means, nationalize or expropriate, except (a)


pursuant to a public purpose and under the process of law, (b) on a non-


discriminatory basis, and (c) upon payment of prompt, just and adequate


compensation based on fair market value:


(a) any Mining Plant, Infrastructure or other property of the Company to the


extent used in, connected with or affecting Operations; or


(b) any Minerals resulting from Operations, the Mining of which is authorized


under the Company’s Mining License(s), or the Produces) derived


therefrom;


(c) any equity, shares or ownership interests of whatever nature held in or


issued by the Company.


The Government further undertakes not to adopt any provision of Law that


imposes a material financial or other burden solely on the Company or any of its


Affiliates, whether or not such provision specifically identifies the Company or


any of its Affiliates as the target thereof, provided that this provision shall not


apply to any Law reasonably intended to protect the safety, health, welfare or


security of the Government or citizens of Liberia or to fulfill the Government’s


international obligations.


19.8 Use o’f Existing.Public Utilities and Facilities; Integration with Company


Infrastructure.


(a) The Company may purchase services from public utilities and other


facilities (such as toll bridges, airports and port facilities) operated or


provided by the Government, or by any other Person under license or


authority of the Government, to the extent adequate (after taking into


account the pubtic use thereof and the Company’s obligations under


Sections 6.6, 6 7 and 19.3 as determined in the reasonable judgment of the


Government to meet the Company’s needs with respect to Operations.


The Government shall ensure that all charges for, and other terms and


conditions of, the use by the Company of public infrastructure are fair and


reasonable, taking into account the cost of providing such infrastructure


and the relative availability of alternatives to the Company and to other


users of such infrastructure. The Government may limit the access of the


Company to any such infrastructure to the extent necessary to meet the


demands of the general public, but in any such case of insufficient capacity


to provide for the needs of both the general public and the Company (and


users similarly situated with the Company), die Minister and the Company


(and such similarly situated users) shall in good faith consider how


additional capacity can be provided in a manner that fairly allocates the


additional costs of providing and operating capacity in excess of that


required by the general public to the Company (and others similarly


situated).











8.3


(b) Inc Government shall use its reasonable efforts to assist the Company to


integrate any item of Infrastructure acquired or constructed by the


Company under an approved Feasibility Report with similar existing


public utilities or facilities operated or provided by the Government, or by


any other Person under license or authority of the Government, to the


extent required by the Company and to the extent reasonable in connection


with Operations and consistent with the needs of the general public.


(c) The Government reserves the right (either directly or through such state


owned or controlled corporations or entities as are permitted by applicable


Law to exercise such a right), on reasonable notice to the Company, after


consultation with the Company and subject to the Company’s prior written


consent if, in the reasonable opinion of the Company, any of the following


actions are likely to substantially interfere with the efficient and economic


conduct of Operations, to construct roads, highways, railroads, power,


telegraph and telephone lines and other lines of communication within the


F.xploration Area or the Production Areas if such action is in the public


interest. The Government will lake account of the reasonable concerns of


the Company, and seek to minimize any disruption or interruption to the


conduct of Operations. In the event of unavoidable disruption or


interruption to Operations in a Production Area attributable to such


construction, the Company is entitled only to compensation for any


verifiable direct, out of pocket additional costs incurred by the Company


and attributable to such disruption or interruption. The Government shall


indemnify and hold harmless the Company from all claims by third parties


for damages attributable to the negligence or misconduct of the


Government or contractors retained by the Government in connection with


such construction.


19.9 Further Undertakings.


(a) The Government undertakes that the contributions and payments set out in


Sections 8.2, 11.3, 16.1, 16.5, and 16.7 are the exclusive and only


payments to be made during the Term with respect to the matters


addressed in those Sections.


(b) The Government undertakes that to the extent that there are any future


amendments, additions, revisions, modifications or other changes to any


Law applicable to the Company or its Affiliates in relation to Operations


that would have the effect of imposing an additional material obligation on


the Company or its Affiliates with respect to the matters addressed in this


Agreement (which are not otherwise subject to Section 19.9(a)):


(i) the parties shall agree on appropriate transitional arrangements that


will apply to the Company and/or its Affiliates in relation to the


introduction of the relevant Law or changes to Law that w'ill


provide the Company and/or its Affiliates with a reasonable period


of time lor the purposes of ensuring compliance with such Law or


changes to Law; and








i ...


f


(n) if the relevant new Law or change in Law results in a delay of more


than 30 days in Operations as a consequence of the Company


ensuring compliance with such new Law or change in Law, the


Company shall notify the Government of such delay (giving


reasons for the delay and details of the work required to be


undertaken by the Company to ensure compliance with the new


Law or change in Law) and the period of time reasonably required


by the Company to ensure compliance. To the extent the Company


requires an extension to the period of time for Exploration, the time


lor the designation of a Proposed Production Area or the lime for


filing a Feasibility Report (as the case may be) it may request an


extension of time from the Government equivalent to the period of


delay resulting from the work to be undertaken by the Company to


ensure compliance with the new Law or change in Law, and the


Government shall not unreasonably withhold its consent to such


extension. If Company believes that the Government has


unreasonably withheld its consent to an extension of time or the


parties cannot agree on the period of a required extension, the


matter shall be referred to a single arbitrator as provided by Section


27.4.


(c) The Government undertakes that all of the funds that will be provided by


the Company under any provision of this Agreement will be used in


accordance with applicable anti-corruption laws.


19.10 Status of this Agreement.





(a) Notwithstanding that this Agreement becomes Law following ratification


by the Legislature in accordance with Section 2, this Agreement is a


contract between the parties which may only be varied in accordance with


Section 33.3.


(b) If there are any amendments to Law which arc stated not to apply to mine


developments agreements issued under the Mining Law then, unless it is


specified to the contrary, this Agreement shall be deemed for those


purposes to be a mine development agreement under the Mining Law.


SECTION 20 OTHER UNDERTAKINGS OF THE COMPANY





20.1 Indemnification of the Government by the Company.


(a) The Company shall indemnify and hold harmless the Government and its


officers and agents from all losses and liabilities incurred as a direct


consequence of death or injury to Persons or damage to property directly


resulting from the conduct by the Company, including for this purpose the


conduct of any contractor described in Section 6.3(f), of its Operations


provided that:


(i) the Government shall notify the Company promptly of any suit,


action, proceedings, claims, investigations and negotiations made








'-r


/


(iv) all liabilities for borrowed money secured by any Lien (whether or


not the Company has assumed or otherwise become liable for such


liabilities);


(v) all liabilities of the Company in respect of letters of credit or


instruments serving a similar function issued or accepted for its


account by banks and other financial institutions representing or


supporting the payment of obligations referred to in clauses


(i) through (iv) hereof; and


(vi) any guarantee or similar undertaking of the Company with respect


to liabilities of a type described in any of clauses (i) through


(v) hereof.


Indebtedness of the Company shall also include all obligations of the


Company of the character described in clauses (i) through (vi) to the extent


the Company remains legally liable in- respect of such obligations


notwithstanding that any such obligation is deemed to be extinguished


under GAAP or IFRS, as applicable under Section 17.4(a).


(d) “Restricted Payment” means (i) any dividends or other distributions or


payments on capital stock or other equity interest of the Company (except


distributions in such stock or other equity interest); and the redemption or


acquisition of any stock or other equity interests in the Company or of


warrants, rights or other options to purchase such stock or other equity


interests (except when solely in exchange for such stock or other equity


interests) unless made, contemporaneously, from the net proceeds of a sale


of such stock or other equity interests, including any such action resulting


in the acquisition by the Company of securities that would constitute


treasury stock, and (ii) any payment, repayment, redemption, retirement,


repurchase or other acquisition, direct or indirect, by the Company of, on


account of, or in respect of) the principal of any subordinated debt (or any


installment thereof) held by the Company, any shareholder of the


Company, any Affiliate of the Company, or any Affiliate of either.


(c) The deductibility or other treatment of any interest payments by the


Company for purposes of Taxes and Duties shall be governed by the


Revenue Code and shall be unaffected by this Section 20.4.


20.5 Provision of Funds and Technical Capability.


The Company shall ensure:


(a) that it has a prudent capital structure and is provided with adequate funds


as and when needed to ensure timely Development and performance of


Operations in accordance with and within the limits defined in the


approved Feasibility' Report and compliance with the requirements of


Section 20.4; and














v


 (b) ihat ii iias directly or indirectly the technical .skills and experience to carry


out its obligations under this Agreement, the Exploration License and each


Mining License.





20.6 Guarantees.





(a) Prior to the Effective Date, the Company has delivered the fully executed


and effective Up-Front Payment Guarantee to the Government and the Up-


Front Payment Guarantee has not been revoked.





(b) Prior to the Effective Date, the Company has delivered a fully executed


and effective guarantee (the '‘Parent Guarantee”1), dated the date hereof,


from each of Sesa Goa, Bloom, and Eleniito (in such capacity, each a


“Parent Guarantor’"), in the form attached as Exhibit 2A hereto, jointly


and severally guaranteeing the performance of the obligations of Bloom


and the Company hereunder, and the Parent Guarantee has not been


revoked. At all times the Sesa Goa, in its capacity as one of the Parent


Guarantors, shall have, a Net Worth (by reference to the Net Worth in its


latest balance sheet (which balance sheet shall be certified by the chief


financial officer of such entity as being true and correct in all material


respects)) which is greater than or equal to USS100,000,000.00 (the


“Parent Guarantor Net Worth Requirements”).





(c) Within five Business Days following the Effective Date, the Company


shall provide the Government an executed guarantee (the “Exploration


Guarantee”!, dated effective as of the Effective Dale, from Eleniito and


Sesa Goa (the “Exploration Guarantor”), in the form attached as Exhibit


2B hereto, guaranteeing the obligations of the Company under Section


10.1 of the Exploration Regulations. At all times Sesa Goa, in its capacity


as one of the Exploration Guarantors, shall have a Net Worth (by reference


to the Net Worth in its latest balance sheet (which balance sheet shall be


certified by the chief financial officer of such entity as being true and


correct in all material respects)) which is greater than or equal to


US$10,000,000.00 (the “Exploration Guarantor Net Worth


Requirements”). The Company represents that the Exploration Guarantor


is an entity that is duly formed and validly existing under the Laws of the


jurisdiction of its formation and that, as of the date of the execution of this


Agreement, Sesa Goa has a Net Worth in excess of L'S$ 1,000,000,000.





(d) As a condition to the grant to the Company of a Class A mining license as


described in Section 5.5, the Company shall provide the Government an


executed guarantee (the “Mining Guarantee”) from Eleniito and Sesa Goa


(the “Mining Guarantor”), which has a Net Worth (by reference to the Net


Worth in the relevant entity’s latest balance sheet (which balance sheet


shall be certified by the chief financial officer of such entity as being true


and correct in all material respects)) which is equal to or greater than


US$100,000,000 (the “Mining Guarantor Net Worth Requirements”), in


the form attached as Exhibit 2C hereto, guaranteeing the obligations of the


Company under the Environmental Restoration Obligations Funding


Agreement, if applicable, and Sections 6.1, 6.2 and 13.1. This provision








V. V


89


shall not preclude the Government from pursuing other remedies to which


it is entitled under this Agreement.


(e) Section 10.3 of the Exploration Regulations or any other provision under


applicable Law relating to the provision of security in connection with the


grant of an Exploration license or a Mining license shall not apply. To the


extent that there is any inconsistency between the Laws relating to the


matters set out in this Section 20.6 (whether in effect at the Effective Date


or enacted thereafter) and this Agreement, this Agreement shall prevail.


(f) The Parent Guarantee, the Exploration Guarantee, the Environmental


Restoration Obligations Guarantee (if applicable) and the Mining


Guarantee (if applicable) shall remain in effect following termination of


this Agreement.


20.7 Transactions with Related Persons.





The Company will not enter into directly or indirectly any transaction or group of


related transactions (including the purchase, lease, sale or exchange of properties


of any kind or the rendering of any service) with any Affiliate or Related Person


of the Company or any Affiliate or Related Person of any shareholder of the


Company, except in the ordinary course and pursuant to the reasonable


requirements of the Company’s business and upon fair and reasonable terms no


less favorable to the Company than would be obtainable in a comparable arm’s


length transaction with a Person not an Affiliate or a Related Person of the


Company or such shareholder.. Without limiting the generality of the foregoing,


(i) each transaction between the Company and an Affiliate or the Company or an


Affiliate of a Company shareholder involving Product(s) shall be on the basis of


the transfer prices determined pursuant to Section 15.3 and Exhibit 4 and (ii) each


transaction between the Company and one of its Affiliates or an Affiliate of a


Company shareholder involving items or services other than Product(s) and a


jjrice or value in excess of US$500,000 shall be supported by an external transfer


pricing study prepared by one of the "Big Four" international accountancy and


professional services firms (a "Big Four Firm") or by another internationally-


recognized, independent transfer pricing expert approved in advance by the


Minister of Finance (a ’Transfer Pricing Study”). All Tax returns of the Company


shall be prepared by, or reviewed prior to filing by, a Big Four Firm or by another


firm of national reputation in the United States or Europe and shall be prepared


and timely filed in accordance such transfer pricing studies. The Ministry of


Finance shall be entitled to review any such transfer pricing studies in connection


with any audit of any of the Company’s Tax returns.


20.8 The Company.


At all times during the Term, (i) the Company shall be a corporation organized


under the laws of Liberia, (ii) none of the Affiliates, directors, officers or other


Persons described in Section 21.1 (c) (whether or not listed on Schedule 3) may be


a Prohibited Person, (Hi) the Company shall be an “Eligible Applicant” under the


Mining Law and (iv) no officer or director of the Company may be a Person


described in Sections 4.2(a), (d), (0 or (g) of the Mining Law.








J


 .SECTION 21 REPRESENTATIONS AND WARRANTIES





21.1 Representations and Warranties of the Company.


The Company represents and warrants to the Government at the date of this


Agreement and on the Effective Date as follows:


(a) The Company is a corporation duly organized, validly existing and in good


standing under the laws of Liberia, and has the corporate power and


authority to execute, deliver and perform its obligations under this


Agreement.


(b) This Agreement has been duly authorized by all necessary corporate action


on the part of the Company, and this Agreement constitutes a legal, valid


and binding obligation of the Company enforceable against the Company


in accordance with its terms, except as such enforceability may be limited


by (i) applicable bankruptcy, insolvency, reorganization, moratorium or


other similar laws affecting the enforcement of creditors’ rights generally


and (ii) general principles of equity (regardless of whether such


enforceability is considered in a proceeding in equity or at law).


(c) Schedule 3 contains (except as otherwise noted) complete and correct lists





or tables setting forth:


(i) the Company’s shareholders;


(ii) the Company's Affiliates showing forth, in each case, its


relationship to the Company and the jurisdiction in which it is


organized;


(iii) the directors and senior officers of the Company, each shareholder


of the Company, and each Person or Group deemed to Control the


Company, and /


each Person or Group that is the ultimate beneficial owner of 5% or more





of (x)the voting rights ordinarily empowered to control the management


of the Company or (v) the rights to share in the profits of the Company,


and the chain through which such rights are exercised.


(d) None of the Affiliates, directors, officers or other Persons identified in


Schedule 3 is a Prohibited Person. The Company is an “Eligible


Applicant” under the Mining Law and no officer or director of the


Company is a Person described in Sections 4.2(a), (d), (f) or (g) of the


Mining Law.


(e) The execution, delivery and performance by the Company of this


Agreement will not Q) contravene, result in any breach of, or constitute a


default under, any agreement or instrument to which the Company is a


party or by which it or any of its properties are bound or affected,


(ii) conflict with or result in a breach of any of the terms, conditions or


provisions of any order, judgment, decree, or ruling of any court, arbitrator








1C


 or governmental authority, applicable to the Company or (hi) violate any


provision of any statute or other rule or regulation of any governmental


authority applicable to the Company.





(0 There arc no actions, suits, investigations or proceedings pending or, to the


knowledge of the Company, threatened, against or affecting the Company


or any property of the Company in any court or before any arbitrator of


any kind or before or by any governmental authority that call into question


the right of the Company to enter into and perform its obligations under


this Agreement or that, if resolved against the Company, would materially


adversely affect its ability to perform its obligations under this Agreement.


(g) Neither the Company, nor any of the Company’s Affiliates, has been


determined under any order, judgment, decree or ailing of any court,


arbitrator or governmental authority to be in material violation of (i) any


applicable Law, ordinance, rule or regulation relating to the protection of


the environment of any governmental authority or (ii) any agreement


pursuant to which it is entitled to extract Minerals or hydrocarbons under


the laws of any jurisdiction


(h) The Company has the experience, finance, expertise, technical know-how


and systems required for the conduct of the activities contemplated by this


Agreement.


.(i) - • None of the Company, any Affiliate of the Company or any Person acting


on behalf of the Company or any Affiliate of the Company has made or


promised to make any payment or transfer of anything of value, directly or


indirectly, to or for the benefit of an Official or an Official’s family


member or to an intermediary for payment to or for the benefit of an


Official or an Official’s family member in connection with this Agreement


or the transactions contemplated hereby. (For the purposes of this


paragraph, “Official” means (i) any employee or officer of the


Government, including any regional or local department or agency or


instrumentality thereof, (ii) any employee or officer of any enterprise


owned or controlled by the Government, (iji) any official of a political


party in Liberia, (iv) any official or employee of a public international


organization, (y) any other person acting in an official capacity for, or on


behalf of, any of the entities described in clauses (i) through (iv), or (vi)


any candidate for political office in Liberia.)


For the avoidance of doubt, this Section 21.1 shall apply in substitution of Section


4.2(d) of the Exploration Regulations, which shall not apply to the Company.


21.2 Representations and Warranties of the Government.


The Government represents and warrants to the Company that on the Effective


Date, the execution, delivery and performance of this Agreement will have


received all necessary governmental approvals and authorizations and will


constitute the legal, valid and binding obligation of the Government.











y


21.3 Repress r.iaiicns. Warranties. and Undertakings of the Shareholders and Sesa Goa.





(a) Elenilto represents and warrants to the Government at the date of this


Agreement and on the Effective Date as follows: (i) it is a limited liability


company, duly organized, validly existing and in good standing under the


laws of the Slate of Delaware, and has the limited liability company power


and authority to execute, deliver and perform its obligations under this


Agreement; (ti) this Agreement has been duly authorized by aJI necessary


limited liability company action on the part of Elenilto, and this


Agreement constitutes a legal, valid and binding obligation of Elenilto


enforceable against it in accordance with its terms, except as such


enforceability may be limited by (A) applicable bankruptcy, insolvency,


reorganization, moratorium or other similar laws affecting the enforcement


of creditors’ rights generally and (B) general principles of equity


(regardless of whether such enforceability is considered in a proceeding in


equity or at law); (iii) the execution, delivery' and performance by Elenilto


of this Agreement will-not (A) contravene, result in any breach of, or


constitute a default under, any agreement or instrument to which it is a


party or by which it or any of its properties are bound or affected,


(B) conflict with or result in a breach of any of the terms, conditions or


provisions of any order, judgment, decree, or ruling of any court, arbitrator


or governmental authority, applicable to it or (C) violate any provision of


any statute or other rule or regulation of any governmental authority


applicable to it; (iv) there arc no actions, suits, investigations or


proceedings pending or, to the knowledge of Elenilto, threatened, against


or affecting it or any of its properties, in any court or before any arbitrator


of any kind or before or by any governmental authority that call into


question the right of the Elenilto to enter into and perform its obligations


under this Agreement or that, if resolved against Elenilto, would materially


adversely affect its ability to perform its obligations under this Agreement;


(v) the representation and warranty of the Company set forth in Sections


21.1(c) a^id (d) are true and correct; and (vi) none of Elenilto, its Affiliates


or any Person acting on behalf of Elenilto or its Affiliates has made or


promised to make any payment or transfer of anything of value, directly or


indirectly, to or for the benefit of an Official or an Official’s family


member or to an intermediary' for payment to or for the benefit of an


Official or an Official’s family member in connection with this Agreement


or the transactions contemplated hereby.


(b) Bloom represents and warrants to the Government at the date of this


Agreement and on the Effective Date as follows: (i) it is a corporation,


duly organized, validly existing and in good standing under the laws of


Mauritius, and has the corporate power and authority to execute, deliver


and perform its obligations under this Agreement; (ii) this Agreement has


been duly authorized by all necessary corporate action on the part of


Bloom, and this Agreement constitutes a legal, valid and binding


obligation of Bloom enforceable against it in accordance with its terms,


except as such enforceability may be limited by (A) applicable bankruptcy,


insolvency, reorganization, moratorium or other similar laws affecting the


enforcement of creditors’ rights generally and (B) general principles of


equity (regardless of whether such enforceability is considered in a


proceeding in equity or at law); (iii) the execution, delivery and


performance by Bloom of this Agreement will not (A) contravene, result in


any breach of, or constitute a default under, any agreement or instrument


to which it is a parly or by which it or any of its properties are bound or


affected, (B) conflict with or result in a breach of any of the terms,


conditions or provisions of any order, judgment, decree, or ruling of any


court, arbitrator or governmental authority, applicable to it or (C) violate


any provision of any statute or other rule or regulation of any


governmental authority applicable to it; (iv) there arc no actions, suits,


investigations or proceedings pending or, to the knowledge of Bloom,


threatened, against or affecting it or any of its properties in any court or


before any arbitrator of any kind or before or by any governmental


authority that call into question the right of the Bloom to enter into and


perform its obligations under this Agreement or that, if resolved against


Bloom, would materially adversely affect its ability to perform its


obligations under this Agreement; (v) the representation and warranty of


the Company set forth in Sections 21.1(c) and (d) are true and correct; and


(vi) none of Bloom, its Affiliates or any Person acting on behalf of Bloom


or its Affiliates has made or promised to make any payment or transfer of


anything of value, directly or indirectly, to or for the benefit of an Official


or an Official’s family member or to an intermediary for payment to or for


the benefit of an Official or an Official’s family member in connection


with this Agreement or the transactions contemplated hereby.


Scsa Goa represents and warrants to the Government at the dale of this


Agreement and on the Effective Date as follows: (i) it is a company, duly


organized, validly existing and in good standing under the laws of India,


and has (he corporate power and authority to execute, deliver and perform


its obligations under this Agreement; (ii) this Agreement has been duly


authorized by all necessary corporate action on the part of Sesa Goa, and


this Agreement constitutes a legal, valid and binding obligation of Sesa


Goa enforceable against it in accordance with its terms, except as such


enforceability may be limited by (A) applicable bankruptcy, insolvency,


reorganization, moratorium or other similar laws affecting the enforcement


of creditors’ rights generally and (B) genera! principles of equity


(regardless of whether such enforceability is considered in a proceeding in


equity or at law): (iii) the execution, delivery and performance by Sesa


Goa of this Agreement will not (A) contravene, result in any breach of, or


constitute a default under, any agreement or instrument to which it is a


party or by which it or any of its properties arc bound or affected,


(B) conflict with or result in a breach of any of the terms, conditions or


provisions of any order, judgment, decree, or ruling of any court, arbitrator


or governmental authority, applicable to it or (C) violate any provision of


any statute or other rule or regulation of any governmental authority


applicable to it; (iv) there are no actions, suits, investigations or


proceedings pending or, to the knowledge of Sesa Goa, threatened, against


or affecting it or any of its properties in any court or before any arbitrator


of any kind or before or by any governmental authority that call into


question the right ol' the Sesa Goa to enter into and perform its obligations


under this Agreement or that, if resolved against Sesa Goa, would


materially adversely affect its ability to perform its obligations under this


Agreement; (v) the representation and wananty of the Company set forth


in Sections 21.1(c) and (d) are true and correct; and (vi) none of Sesa Goa,


its Affiliates or any Person acting on behalf of Sesa Goa or its Affiliates


has made or promised to make any payment or transfer of anything of


value, directly or indirectly, to or for the benefit of an Official or an


Official’s family member or to an intermediary for payment to or for the


benefit of an Official or an Official’s family member in connection with


this Agreement or the transactions contemplated hereby.


(d) Without limitation to its capacity as Guarantor, Elenilto, Bloom, and any


other Person that becomes a Shareholder and Sesa Goa shall be jointly and


severally liable for all obligations and liabilities of the Company under this


Agreement.


- SECTION 22 CONFIDENTIALITY


22.1 The Agreement.


This Agreement is not confidential, and the Company is not entitled to


confidential treatment of information relating to this Agreement except as


expressly provided in the Exploration Regulations and set out in Section 22.2.


The Government or the Company may, and the Government expects to, make


public information 'relating to the timing and amount of Royalties and other


payments specifically due or paid under the terms of this Agreement or of Taxes


and Duties payable or paid by the Company or the rates at which Royalties, Taxes


and Duties or other payments become due or are assessed.


22.2 Other Information,





(a) Subject to the limitations set out in Section 22.2(b) and subject to Section


22.1, for a period of three years from disclosure, each party agrees not to


divulge information designated in writing by the other party at the time of


delivery' as confidential information or which relates to the Company’s


Products, Operations, processes, plans or intentions. Product information,


know-how, design rights, trade secrets, market opportunities and business


and financial affairs (“Confidential Information") to any other Person


without the prior written consent of the designating party. By designation


of information as Confidential Information a party will be deemed to have


represented that after review of such information it has reasonably


determined that the release of such information to third parties would


materially adversely affect the party or its economic well-being.


(b) Confidential Information docs not include information that:





(i) was publicly available or otherwise known to a parly prior to the


time of disclosure to it and not subject to a confidentiality


obligation;


(ii) subsequently becomes publicly known through no act or omission


by a party;


(iii) constitutes financial statements delivered to the Government under


Section 17.4 that are otherwise publicly available;


(iv) is of scientific rather than commercial value, such as geological


arid geophysical data relating to areas in which the Company no


longer holds a valid Exploration License and has not designated as


a Proposed Production Area; or


(v) has been disclosed pursuant to generally applicable Law or a final


order of any court having jurisdiction that is not subject to appeal.


(c) Each parly will maintain the confidentiality of Confidential Information


disclosed to it in a manner consistent with procedures adopted by such


party' to protect its own confidential information, provided that such party


may deliver or disclose Confidential Information to:


(i) its Affiliates, and its Affiliates’ financial, legal and other


professional advisors of the party or its Affiliates (to the extent


such disclosure reasonably relates to the administration of this


Agreement); or


(ii) any other Person to which such delivery or disclosure may be


necessary or appropriate' (A) to effect compliance with any law,


rule, regulation or order applicable to such party, (B) in response to


any subpoena or other legal process, (C) in connection with any


litigation to which such party is a party if reasonably considered


necessary to protect such party’s position in such litigation or (D) if


an Event of Default has occurred and is continuing but only to the


extent such party reasonably determines such delivery and


disclosure to be necessary or appropriate in the enforcement or for


the protection of the rights and remedies under this Agreement.


SECTION 23 ASSIGNMENTS, TRANSFERS AND CHANGES OF


CONTROL


The restriction on Transfers contained in Section 23.1 and the restriction on Changes of


Control in Section 23.4 are to be independently applied.


23.1 General Transfer Rule





No Transfer of (L) this Agreement or a Mining License, or (2) any rights of the


Company in a Mine or any Immovable Infrastructure (other than in the ordinary


course of renewal and replacement of its properties and other than Transfers of


Product(s) in the ordinary course of business) is permitted unless the Transfer (i)


has received the prior written consent of the Government, which consent may be


given or withheld in its sole discretion, or (ii) is otherwise permitted under the


terms of Section 23.2, 23.3 or 23.6. Unless the Company has received the prior


written consent of the Government, which consent may be given or withheld in its


sole uijwjXvioi:, the company may not Transfer any Exploiauon License relating


to the Exploration Area independently of a Transfer of this Agreement; any


Transfer by the Company of all of this Agreement shall be deemed to include a


Transfer of all rights of the Company under any such Exploration License.


23.2 Permitted Transfer to an Affiliate


(a) A Transfer of (X) this Agreement and each Mining License or Exploration


License issued pursuant to this Agreement (if any), and (2) all rights of the


Company in the Mine, Mining Plant, Infrastructure (i) to an Affiliate or (H)


as a consequence of a merger or consolidation of the Company with an


Affiliate of the Company in which the Company is not the survivor, is


permitted if:


(t) at the time of the consummation of such transaction the Company


has not been notified by the Government that it is in material


default in (lie performance of its obligations or the discharge of its


liabilities under this Agreement (other than any obligations that


have been waived by the Government or defaults that have been


cured by the Company to the reasonable satisfaction of the


Government) and no order suspending Work by the Company


issued under Section 24 of this Agreement or Section 16 of the


Exploration Regulations is outstanding and unresolved;


(ii) such transaction is not otherwise in violation of applicable Law;


(iii) such transaction does not result in a Change of Control; and


(iv) the survivor or transferee, as the case may be, is (x) a corporation


organized and validly subsisting under the laws of Liberia and (y)


an “Eligible Applicant” under the Mining Law and a Permitted


Transferee under Section 23.8, and delivers to the Minister, the


Minister of Finance and the Chairman of the National Investment


Commission prior to the consummation of such Transfer:


(A) its agreement, in the form of a deed of adherence to this


Agreement or a novation of this Agreement, to assume and


perforin or discharge all of the obligations and liabilities of


the Company under this Agreement and each Mining


License;


(B) its written representations and warranties to the effect set


forth in Section 21.1 stated to be true and correct as of a


time immediately after giving effect to such Transfer;


(C) the confirmation of the Company, if it continues to exist


following such transaction, that it remains liable for the


performance and discharge of its obligations and liabilities


under this Agreement and each such Mining License, unless


otherwise agreed by the Minister; and











97


(t>) the continuation of the Guarantors that the Guarantees


provided pursuant to Section 20.6, to the extent required, to


apply to the survivor or transferee, as the case may be.


(b) Any failure by the Government to give notice to the Company in


accordance with clause (i) of Section 23.2(a) shall not affect the


Government's rights and remedies under this Agreement to the extent the


Company was in default in a material respect in the performance of its


obligations or the discharge of its liabilities under this Agreement or under


the Exploration Regulations, which have not been cured to the reasonable


satisfaction of, or waived by, the Government.


23.3 Permitted Transfer to a Person not an Affiliate.





A Transfer of (X) this Agreement and each Mining License issued pursuant to this


Agreement (if any), and (2) all rights of the Company in the Mine, Mining Plant,


Infrastructure (i) to a Person not an Affiliate of the Company or (n) as-a


consequence of a merger or consolidation of the Company with a Person not an


Affiliate of the Company in which the Company is not the survivor, is permitted if


each of the requirements of Section 23.2(a) is satisfied other than clause (iii) of


Section 23.2(a) and clause (iv)(D) of Section 23.2(a) and in addition the survivor


or transferee, as the case may be,


(a) has demonstrated to the satisfaction of the Government, acting reasonably,


that it has directly or indirectly the technical skills, experience and


financial resources necessary (or could be reasonably expected to obtain,


the financial resources necessaiy as evidenced by a viable financing plan,


which is supported by an appropriate commitment letter from any provider


of finance) to carry out its obligations under this Agreement, each


Exploration License and each Mining License; and


(b) has delivered to the Minister of Finance guarantees, to th^ extent required,


in the form and from an entity or entities required by Section 20.6


guaranteeing the specified obligations of the survivor or the transferee, as


the case may be.


If the Government objects to any proposed survivor or transferee on the


basis that such proposed survivor or transferee does not satisfy the


requirements specified in Section 23.3(a), it shall notify in writing its


objection to the Company, giving reasons therefor, within one month from


the date it receives notification from the Company that it proposes to make


a permitted Transfer in accordance with this Section 23.3. If the Company


has not received such notification from the Government within one month


from the date the Government received its notification of a proposed


permitted Transfer, the proposed survivor or transferee shall be treated as


having satisfied the requirements specified in Section 23.3(a).


23.4 General Change of Control Rule,


No Change of Control of the Company is permitted unless it has received the prior


written consent of the Government or is otherwise permitted under the terms of


Sec:'...,:. 35.5 ui 23.'j. For the avoidance ol doubt, the granting of any pledge,


mortgage, charge or other encumbrance, which, if exercised would result in a


Change of Control, will not be treated as a Change of Control until exercised.


23.5 Permitted Changes of Control.


(a) A Change of Control with respect to (he Company is permitted if the


Change of Control occurs solely by operation of a Transfer otherwise


permitted under Section 23.3 or if:


(i) at the time of the Change of Control the Company has not been


notified by the Government that it is in material default in the


performance of its obligations or the discharge of its liabilities


under this Agreement (other than any obligations that have been


waived by the Government or defaults that have been cured by the


Company to the reasonable satisfaction of the Government) and no


order suspending Work by the Company issued under Section 24 of


this Agreement or Section 16 of the Exploration Regulations is


outstanding and unresolved;


(ii) the Company delivers to the Government prior to the Change of


Control its written representations and warranties to the effect set


forth in Section 21.1 stated to be true and correct as of a time


immediately after giving effect to such Change of Control;


(iii) the Company has demonstrated to the satisfaction of the


Government, acting reasonably, prior to the Change of Control that


alter giving effect to the Change of Control it will have directly or


indirectly the technical skills, experience and financial resources


necessary (or could be reasonably expected to obtain the financial


resources necessary' as evidenced by a viable financing plan, which


is supported by an appropriate commitment letter from any


provider of finance) to carry out its obligations under this


Agreement, each Exploration License and each Mining License;


and


(iv) prior to the Change of Control, either the Guarantors under the


Guarantees issued pursuant to Section 20.6 have confirmed to the


Minister of Finance in writing the continued effectiveness of the


Guarantees notwithstanding the Change of Control or the Company


lias delivered to the Minister of Finance new Guarantees in the


form and from an entity or entities requited by Section 20.6


guaranteeing the specified obligations of the Company under this


Agreement.


(v) prior to the Change of Control, the withholding tax imposed


pursuant to Section 14.3 has been paid.


(b) If the Government objects to any Changes of Control on the basis that


following such proposed Change of Control (lie Company would not


satisfy the requirements specified in clause (iii) of Section 23.5(a), it shall


iiouly in writing its objection to the Company, giving reasons therefor,


within one month from the date it receives notification from the Company


that it proposes to make a permitted Change of Control in accordance with


this Section 23.5. If the Company has not received such notification from


the Government within one month from the date the Government received


its notification of a proposed permitted Change of Control, the Company


shall be treated as having satisfied the requirements specified in clause (iii)


of Section 23.5(a) following such Change of Control.


(c) Any failure by the Government to give notice to the Company in


accordance with clause (i) of Section 23.5(a) shall not affect the


Government’s rights and remedies under this Agreement to the extent the


Company was in default in a material respect in the performance of its


obligations or the discharge of its liabilities under this Agreement or under


the Exploration Regulations (as modified by this Agreement), which have


not been cured to the reasonable satisfaction of, or waived by, the


Government.


(d) If a Person who acquires Control is a wholly-owned subsidiary of a Person


who has Control and such acquiring Person continues to have Control after


such transaction then such transaction will not be treated as a Change of


Control.


23.6 Right to Encumber, and Related Transfers and Changes of Control.


The Company may mortgage, charge or otherwise encumber (collectively, a


“Mortgage”), in a single financing, all but not less than all of its interest under this


Agreement and each Mining License as security for an obligation or indebtedness


as contemplated by Section 9.18 of the Mining Law- if such Mortgage also covers


all right, title and interest of the Company in the Mine, Mining Plant,


Infrastructure and related equipment (collectively with its rights under this


Agreement and each such Mining License, the “Mortgaged Property’^ and the


holder of such Mortgage agrees in writing with the Minister prior to the granting


of such Mortgage that it will cause a foreclosure or other exercise of remedies


under such Mortgage against the rights of the Company in the Mortgaged Property


to occur only if:


(a) the exercise of remedies results in a Transfer of 100% of the interest of the


Company in the Mortgaged Property to a corporation other than the


Company organized and validly subsisting under the laws of Liberia;


(b) the transferee delivers to the Minister, the Minister of Finance and the


Chairman of the National Investment Commission prior to such Transfer


(i) its agreement, in form and substance reasonably satisfactory to the


Minister, the Minister of Finance and the Chairman of the National


Investment Commission to assume and perform or discharge all of


the obligations and liabilities of the Company under this


Agreement and each such. Mining License;


(u, evidence that ail requited consents or approvals oi the HPA and


any other agencies of the Government to the grant of such


Mortgage have been obtained; and


(iii) its written representations and warranties to the effect set forth in


Section 21.1 staled to be true and correct as of a time immediately


after giving effect to such Transfer;


(c) the transferee has demonstrated prior to such Transfer to the reasonable


satisfaction of the Minister, the Minister of Finance and the Chairman of


the National Investment Commission that it has the technical skills,


experience, and financial resources necessary' to carry out its obligations


under this Agreement and, where relevant, each Mining License; and


(d) all outstanding failures of the Company to make any payments due to the


Government under this Agreement have been cured at the time of such


Transfer (including a failure to pay royalties due but excluding any failure


to pay taxes due on income or profits), and the transferee has undertaken to


cure all other defaults of the Company then existing (to the extent they can


be cured by an entity other than the Company) within 270 days of the date


of the transfer.


Any exercise of remedies under a Mortgage in compliance by such holder in


accordance with the requirements set forth in this Section 23.6 is both a permitted


Transfer and a permitted Change of Control.


If requested, the Minister, acting on behalf of the Government, will enter into an


agreement with any such holder embodying the terms of this Section 23.6 at the


time any such Mortgage is granted.


Notwithstanding the foregoing provisions of this Section 23.6, the Company may


grant purchase money security interests in any Movable property owned by it.


Any other partial assignment shall be subject to the Government's prior written


approval.


23.7 Reissue of Minina License in Name of Transferee; Mining License Invalid unless


Reissue Request Timely Received.


The Minister shall reissue in the name of the transferee any Mining License that is


the subject of a Transfer permitted under this Section 23 within 30 days after


receipt of a transfer request from the transferor or the transferee. A Mining


License becomes invalid 90 days after a Transfer otherwise permitted under this


Section 23 unless a request to reissue the Mining License in the name of the


transferee is received by the Minister within such 90-day period.


23.8 Permitted Transferee.


A “Permitted Transferee” is a Person permitted to hold a Mining License under


the Mining Law who (i) is not a Prohibited Person, does not have an officer or


director who is n Prohibited Person, and is not controlled by a Prohibited Person,


and (ii) as to which no Person or Persons holding in the aggregate (x) in excess of








101


5% of the voting lights ordinarily empowered to control the management of such


Person or (y) in excess of 5% of the rights to share in the profits of such Person is


or are Prohibited Persons. A “Prohibited Person” is a Person that has been (i)


identified as such in regulations issued under the authority of the Ministry of


Finance and the Ministry of Justice and applicable to the holders of licenses issued


under the Mining Law, (ii) has been identified as being subject to sanctions by any


member organization that Government is a member of, or with which Government


has entered into treaties or other agreements with, provided such person has been


provided due process under the law, or (iii) has been identified by Government as


a Person that would pose a serious risk to the national security, public health and


safety or the economic or political stability of Government. A “Prohibited Person”


also includes any Person that issues bearer shares or other instruments to evidence


ownership of such Person that do not permit the identification of the owners of


such Person.


23.9 Responsibility of Licensee.


It is the responsibility of the Company and its Controlling Persons to ensure that


Management Rights with respect to the Company are structured and held in such a


manner that transfers of such rights arc made in compliance with the Change of


Control provisions of this Section 23.


23.10 Disclosure: Consents: Exceptions; Fees.


(a) If the Minister questions whether a Transfer or a Change of Control


occurred without a required consent, the Company has (he burden of


demonstrating that consent was not required


(b) A Transfer or a Change of Control does not comply with the requirements


of this Section 23 if any representations and warranties required to be


delivered in connection with such Transfer or Change of Control were not


true and correct in any material respect as of the date as of which they


were made.


(c) A Mining License the subject of a Transfer in violation of this Section 23


becomes invalid upon such Transfer. A Mining License the subject of a


Change of Control in violation of this Section 23 becomes invalid 30 days


after the occurrence of such Change of Control unless the transaction(s)


constituting such Change of Control are reversed within such 30-day


period and the Company within such 30-day period reports to the Minister


such occurrence and the steps taken to reverse it within five days after the


end of such 30-day period.


(d) A Ministerial or Governmental consent required under this Section 23 will


not be given prior to payment of the processing fee provided under Section


[6.1(f).


(e) For the avoidance of doubt, this Section 23 shall apply in substitution of


Section 15 of the lixploralion Regulations, which shall not apply to the


Company or its Affiliates. To the extent that there is any inconsistency


between the Law-s relating to the matters set out in this Section 23


 (.wiit-uicr .:i ciieci ai the bl'fccuvc Date or enacted thereafter) and this


Agreement, this Agreement shall prevail.





23.11 Terms used in Section 23.


for the purpose of this Section 23 a '‘Controlling Person” is a Person who


Controls the Company or who is a member of a Group that Controls the


Company; and if a trust or other entity holds the rights to share in the profits of a


Person, the beneficiaries of such trust are deemed to hold the rights to share in the


profits of that Person.


SECTION 24 SUSPENSION





24.1 Power of Minister to Suspend Work.


The Exploration Regulations govern the right to suspend Work during the term of





the Exploration License subject to the terms of this Agreement. After the issuance


of a Mining License pursuant to Section 5 the Minister may order the suspension


of all or the relevant portion of any Operations being carried on by the Company


under the authority of this Agreement and such Mining License if any of the


following events or conditions relating to the Company has occurred and is


continuing:


(a) the Company did not pay a surface rent payment when due and the failure


is not cured within 15 days after the Company receives notice of the


failure from the Minister or the Minister of Finance; or


(b) the Minister has determined that continuation of such Operations would


constitute a material continuing violation of Section 9.1 or would


otherwise pose significant risks to the health and safety of workers


engaged in or affected by such Operations or of individuals residing in or


near any Production Area or any other area in which the Company is


conducting Operations; or /


(c) an environmental assessment and audit under Section 13 has demonstrated,





or the Minister or the EPA, as the case may be, has determined (acting


reasonably) that there exist material failures to comply with the approved


EMP and the Company has not remedied such failures to the satisfaction


of the Minister or the EPA (acting reasonably), as the case may be, within


90 days from notice to the Company from either of them as to the nature of


such failures; or


(d) the Company is in violation of Section 6.3(b) (other than an isolated


immaterial violation); or


(e) the Company is conducting Mining Operations outside of the Production


Area that is the subject of such Mining I.iccnse; or





(0 the Company is in breach of any its obligations under Section 20.4 or


Section 20.8 and has not cured such breach within 90 days after receiving


notice from the Minister of such breach; or








<


105


(g) the Company is in material breach of any its obligations under Section


17.4 or Section 20.3 and has not cured such breach within 90 days after


receiving notice from the Minister of such breach; or


(h) the Company is in default of its obligation to pay Royalties under Section


15.1 in excess of USX 100,000, and such default has not been cured within


30 days after notice from the Minister or the Minister of Finance.


24.2 Order Suspending Work.


Except as provided in the following sentence, a suspension order shall be in


writing and signed by the Minister, and will be effective the Business Day


following its receipt by the Company at its address for notices, or, if delivered to


the person in charge at a field office or other location at which the Operations to


be suspended are being performed, is effective on delivery. An order of


suspension based on a violation of Section 9.1 that has resulted in (or is


determined by the Minister to create a serious risk of resulting in) death or severe


personal injury may be given by telephone confirmed in writing within 24 hours,


and is effective immediately. Any suspension order (except a telephone order


under the preceding sentence) shall set forth in a summary manner the facts relied


upon for the issuance of the order and the name, location and telephone number of


a responsible person at the Ministry (or the Ministry of Finance, as the case may


be) who may be contacted for additional information. Subject to Section 24.5,


neither the Company’s payment obligations under nor the term of this Agreement


or 'the term of the relevant Mining License are suspended by an order of


suspension under this Section.


24.3 Compliance with Suspension Order.


The Company shall comply with an order of suspension properly given under this


Section 24 until such order is withdrawn (or deemed withdrawn) pursuant to


Section 24.4 or is directed to be withdrawn pursuant to an administrative order in


a hearing held pursuant to the Administrative Procedure Act of Liberia, or an


order in a judicial proceeding, or pursuant to an arbitration under Section 27.


24.4 Resumption of Work.


The Company may at any time submit a request that a suspension order be


withdrawn, setting forth in reasonable detail the facts and circumstances relied


upon to demonstrate the elimination or correction of the event or condition that


supported the issuance of the order. The Minister shall withdraw the order if the


event or condition no longer exists or has been remedied to the satisfaction of the


Minister, acting reasonably. If within ten Business Days of receiving such


submission the Minister neither grants such request nor noli lies the Company of


the reasons for not granting such request, the order involved will be deemed


withdrawn. If within five Business Days of receiving a resubmitted request for


withdrawal of the same order, the Minister does not either grant such request or


give notice to the Company setting forth reasons for not granting such request, the


order involved will be deemed withdrawn. The initial and each subsequent


resubmission (if any) shall be conspicuously marked to show all changes


(additions and deletions) from the previous submission.


24.5 Suspension Order Incorrectly Given.





In the event that the Government issues an order of suspension and the Company


disputes the existence of a breach or otherwise disputes the validity of such an


order, any dispute shall be resolved in the manner set out in Section 27. In the


event that an arbitral award determines that the suspension order was incorrectly


given, the Company shall, as the case may be, (i) obtain an extension of time


equivalent to the amount of time the suspension order was in effect in relation to


the time for Exploration, the time for the designation of a Proposed Production


Area and the time for filing a Feasibility Report or (ii) if it has been detennined


that a Company Event of Default under Section 25.2(e) is directly attributable to


' the incorrectly given order, be excused from such Company Event of Default for a


period reasonably necessary to cure such Company Event of Default.


SECTION 25 EVENTS OF DEFAULT; TERMINATION





25.1 Government Events of Default.


A “Government Event of Default” shall exist:





(a) if (i) the Government shall have failed to comply with its material


obligations under this Agreement and such failure has had a Material


Adverse Effect on the Company, (ii) such failure is continuing for more


than 90 days after the Company notifies the Government of such failure


and (Hi) within such 90 day period the Government has not cured the


adverse impact of such failure; or


(b) any representation or warranty of the Government continued in


Section 21.2 proves to be false or incorrect in any material respect on the


date as of which made.


25.2 Company Events of Default.


f


A “Company Event of Default” shall have occurred if any of the following


conditions or events shall occur and be continuing:


(a) the Company shall have failed to make any payment of surface rent and,


subject to Section 25.3, such failure not cured within 15 days of notice


from the Minister or the Minister of Finance; or


(b) the Company shall have failed to make any other payment due under this


Agreement, the Exploration Regulations, any Mining License issued


pursuant to this Agreement or any undertaking of the Company provided


for in this Agreement and, subject to Section 25.3, such failure is not cured


within 30 days of notice from the Minister or the Minister of Finance; or


(c) Standard Chartered Bank shall revoke the Up-Front Payment Guarantee;


or


(d) any Parent Guarantor, the Exploration Guarantor or the Mining Guarantor





(if applicable) shall revoke the Parent Guarantee, the Exploration


Guarantee or the Mining Guarantee, as applicable, or the applicable





5*


105 /


Guarantor shall no longer satisfy the applicable Guarantor Net Worth


Requirements, and the Company shall have failed to provide a replacement


Parent Guarantee, Exploration Guarantee or Mining Guarantee (if


applicable) provided by a Person which meets the applicable Guarantor


Net Worth Requirements within 90 days after receipt of notice thereof


from the Minister or the guarantor under Environmental Restoration


Obligations Guarantee is no longer an Acceptable Third Party Financial


Institution and the Company shall have failed to provide a replacement


guarantor in accordance with Section 5.7(c); or


(e) any representation or warranty of the Company contained in Section 21.1


or Section 20.6(a) proves to have been false or incorrect in any material


respect on the date as of which made; or


(f) the Company shall default in the performance of any other material


obligation of the Company.under this Agreement, any Mining License, the


Environmental Restoration Obligations Funding Agreement (if applicable)


or any undertaking of the Company provided for in this Agreement and


shall have failed to cure such default within 60 days after notice thereof


from the Minister (from the Minister of Finance, in the case of a failure to


pay any Taxes and Duties within the grace period provided by applicable


Law); or


(g) the Company shall (i) voluntarily 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 ordinary course of


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


appointment of a trustee or receiver for all or any substantial part of its


assets, (in) commence any proceedings for its bankruptcy, reorganization,


arrangement (other than a scheme of arrangement not involving an


insolvent company) or insolvency under any laws applicable it whether


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


any such proceedings are commenced against it, indicate its approval


thereof, consent thereto or acquiescence therein, or (iv) if any order is


entered appointing any such trustee or receiver, or adjudicating it bankrupt


or insolvent, or approving the petition in any such proceedings, permit


such order to remain in effect for more than 90 days.


25.3 Disputed Payments.


If the Company is notified by the Minister or the Minister of Finance in


accordance with Section 25.2 that is has failed to make any payment due under


this Agreement, the Exploration Regulations (as modified by this Agreement), any


Mining License issued pursuant to this Agreement or any undertaking of the


Company provided for in this Agreement (a ‘‘Payment Notice”), and the Company


disputes part or all of the amount which is the subject of the Payment Notice, it


shall, within ten Business Days of receipt of the Payment Notice, notify the


Minister or the Minister of Finance of that fact, giving reasons therefor. To the


extent the parlies are unable the resolve the dispute within a reasonable period of


time (taking into account the subject matter of die dispute), the parties shall


resolve such dispute in accordance with Section 27. Nothing in this Section 25.3


shall relieve the Company from being obliged to pay any undisputed amount


which is the subject of a Payment Notice within the time periods referred to in


Section 25.2.


25.4 Nature of Notice of Default.


Any notice of an alleged Event of Default by either party shall identify with


reasonable clarity the principal provision or provisions with respect to which the


default arises and the facts alleged to constitute such default.


25.5 Notice of Termination: Termination When a Mortgage Exists; Arbitration of


■Disputes as to Existence of Event of Default,


(a) If an Event of Default with respect to a parly has occurred and is


continuing, the other party may give the defaulting party notice of


termination (a “Termination Notice”), This Agreement and each


Exploration License or Mining License shall terminate (50 days after


receipt of the Termination Notice by the defaulting party (or at such later


time as may be provided in the Termination Notice), subject to Sections


25.5(b) and (c)..


(b) If a Mortgage permitted under Section 23.6 exists, the Termination Notice


will not be effective so long as the Company, the holder of the Mortgage


and the responsible officer of any relevant tribunal referred to in Section


25.2(f) ar.e .diligently seeking to transfer the rights and obligations of the


Company under this Agreement, any Mining License, the Mine and


substantially all of the Mining Plant, Infrastructure and related property of


the Company to a transferee that would be permitted under Section 23 so


long as (i) such a transfer is completed within 18 months from the


commencement of such proceedings, (ii) the operations of the Company


continue on a commercial scale throughout such period (subject to Force


Majeure) in substantial compliance w'ith the requirements of this


Agreement and the relevant Mining License, and (iii) the Company


becomes and remains in compliance with its EMP and its payment


obligations under this Agreement.


(c) Any dispute relating to the existence of an Event of Default, its remedy


and any purported termination in connection therewith pursuant to this


Section 25 shall be resolved in the manner set out in Section 28. If a party


asserts the existence of an Event of Default and the other party refers to


arbitration in accordance with Section 27 a dispute as to the existence of


such Event of Default, termination of this Agreement may not take effect


other than after the finality of, and in accordance with, an arbitration award


upholding the existence of such Event of Default. In the event that an


arbitration award upholds the existence of such Event of Default, the party


in default shall be entitled to cure the default in accordance with the


relevant cure period specified in this Section 25. Failure to cure ihc


default within such period shall entitle the non-defaulting parly to


terminate this Agreement in accordance with Section 25.5(a). The


Company shall reimburse the Government for all expenses incurred by it


in connection with arbitration held pursuant to this Section 25.5(c) if the


Government’s determination that a Company Event of Default exists is


upheld in the arbitration. The Government shall reimburse the Company


for all expenses incurred by it in connection with arbitration held pursuant


to this Section 25.5(c) if the Company’s determination that a Government


Event of Default exists is upheld in the arbitration. For (he avoidance of


doubt. Section 18 of the Exploration Regulations or any other equivalent


provision under applicable Law shall not apply.


Automatic Termination.





If, at any time during the Term:


(a) the Company has no remaining Exploration Licenses or Mining Licenses


and is not awaiting the issuance of a Mining License pursuant to Section


5.9(g); or


(b) no Proposed Production Area has been designated by the Company


pursuant to Section 5.1 (a) and there are no areas as to which the Company


has extended the time lor designating Proposed Production Areas pursuant


to Section 5.3(a)(i) as to which the period for extension has not expired; or


(c) no Feasibility Report has been submitted by the Company pursuant to


Section 5.2(a) and there arc no Proposed Production Areas as to which the


Company has extended the time for filing a Feasibility' Report pursuant to


Section 5.3(a)(ii) or has received approval from the Government to deliver


a Feasibility Report pursuant to Section 5.4, in each case as to which, if the


applicable Feasibility' Report has not been filed, the applicable time for


filing has not expired; and


(d) there are no other designated Proposed Production Areas as to which (he


applicable deadline for Filing a Feasibility Report has not expired; or


(e) the deadline for Feasibility Report submission specified in Section 5.2(a)


has expired, there are no Proposed Production Areas as to which the


Company has extended the time for filing a Feasibility Report pursuant to


Section 5.3(a)(ii) or has received approval from the Government to deliver


a Feasibility Report pursuant to Section 5.4, in each case as to which, if the


applicable Feasibility Report has not been filed, the applicable time for


filing has not expired, and there arc no Feasibility Reports, including any


amendments, modifications or supplements thereof, under review by the


Ministry'; and


(t) there are no Disapproved Feasibility Reports as to which the applicable


time periods set forth in Section 5.9(e) have not expired,


this Agreement shall automatically terminate without requirement of action by the


Company or the Government and the Company and the Government shall have no


further obligations under this Agreement other than 0 with respect to the


Company, its closure management obligations as set out in its Approved Work


Program and Budget or its approved BMP (as applicable) and (ii) with respect to


both parties those matters that survive pursuant to, and all other liabilities or


/' 0 .


obligations described in, Section 36.8; provided that this Agreement shall not


terminate pursuant to this Section 25.6 unless the Government has first provided


written notice of its determination that a condition or event under this Section 25.6


exists or has occurred (as the case may be) and the Company, within a period of


not more than sixty (60) days from receipt of such notice, has failed to present


evidence reasonably acceptable to the Government that such condition or event


does not exist or has not occurred (as the case may be).





25.7 Winding-up Commission.


(a) Except as provided in Section 25.7(d), if a notice of termination has been





given, the parties hereto shall set up a winding up commission (hereinafter


referred to as the '‘Commission”) which shall consist of two directors of


the Company, two members appointed by the Government and a member


of an internationally recognized accounting or law firm selected by the


Government and reasonably acceptable to. the Company, who will be the


“Chairperson of the Winding Up Commission”. The fifth member may


not in the last ten years have represented the interests of the Government


or the Company and his or her firm may not in the past five years have


been regularly retained by the Government or the Company. The


Chairperson will be responsible for scheduling meetings, for establishing


the agenda of meetings, and for keeping the record of meetings.


..(b) The Chairperson of the Winding Up Commission shall issue a notice and


agenda for the first meeting of the Commission, which shall be held no


later than three weeks after the establishment of the Commission.


Thereafter, the Commission shall hold periodic meetings at least once a


calendar month.


(c) The Company shall present to the Commission within 30 days of its





establishment a summary report, and within 60 days of its establishment a


detailed report, on the status of Operations as of the date of termination so


that the Commission will be able to make recommendations to the


Government as to whether the Commission and the Company should seek


to transfer the assets and operations of the Company to a third party, or


should establish plans for the full or partial cessation of operations


including the disposition of assets and their demolition or removal


according to Section 26 and the restoration of the areas environmentally


adversely affected by Operations to such condition as prescribed in the


closure management plan provided for in the EMP.


(d) The operation of this Section 25.7 is suspended under the circumstances


contemplated by Section 25.5(b) or pending the final decision of an


arbitration challenging such termination commenced under Section 27.


The notice of arbitration is automatically terminated if a transfer


contemplated by Section 25.5(b) is timely completed or if a final decision


in an arbitration commenced under Section 27 determines that the notice


of termination is invalid or should be disregarded.








r'F-





P


109


 SECTION 26 DISPOSITION OK ASSETS





General Provision.


Prior to the termination of this Agreement, the Company shall have the right to





control all its Mining Plant, Infrastructure and other assets {other than any such


Infrastructure located in the Port or any other port where the Company may


conduct Operations), whether or not the same may revert to and become the


property of the Government upon such termination, and, to the extent no longer


required for Operations or for compliance with any specific provision of this


Agreement, to dispose of in the ordinary course of its business any such assets


(other than Land leased from the Government, Immovables or the Company’s


rights under any Exploration License or any Mining License).


26.2 Disposition of Assets on Termination bv the Government or Expiration of the


Term.


Upon the termination of this Agreement for any reason excluding termination by





the Company upon the occurrence and continuation of a Government Event of


Default, the following rules apply:


(a) The Company shall deliver to the Government, not more than 90 days after


the termination date a list (the ‘'Property List”! describing in reasonable


detail and locating:


(i) all Mining Plant and Infrastructure constituting structures or


installations of any kind, including structures and installations and


other Infrastructure to which the Government has title (including


all Infrastructure located in the Port or any other port where the


Company may conduct Operations), and any Movable assets


required for the full use or operation of any such Mining Plant and


Infrastructure (such as, by way only of example, computers and


computer programs controlling the operation of Mine ventilation


systems and elevators), but excluding other Movable assets,


identifying which assets could be used in continued Operations or


otherwise and which in the good faith judgment of the Company


have no further utility; and


(ii) the Mine, any assets required for the full use or operation of the


Mine and all Mining Plant and Infrastructure constituting


improvements to the Land (including such things as roads,


earthworks, bridges and dams, but excluding any Movable assets).


The Property List shall also set forth the estimated fair market value of





each Movable asset contained on such list. Movable assets identified in


clause (i) of this Section 26.2(a) may be grouped for valuation purposes by


generic type of asset and physical location, so that, for example, all


Movable assets in a particular heavy equipment maintenance shop might


be classified for valuation purposes as “mine truck parts and supplies,”


“dragline and shovel parts and supplies” and “maintenance equipment”,


but such grouping for valuation purposes docs not excuse the Company


from the duty to describe such Movable assets in reasonable detail and the


Government may request that the price for specified items included on the


Property List be broken out from such aggregate valuation. The Property


List shall be accompanied by a certificate of the Chief Executive Officer of


the Company to the effect that such list is complete and correct in all


material respects.


(b) The Company shall, as part of its closure responsibilities, remove all such


structures and installations described in the Property List pursuant to


clause (i) of Section 26.2(a) and to which the Company has title except


insofar as the Government, within 90 days of receipt of such list, has


directed the Company to transfer to the Government such structures or


installations, related rights to Land (in the case of any such assets not


located on Government Land), and any Movable assets which the


Government elects to purchase pursuant to Section 26.2(f)- The Company


shall transfer to the Government, without charge, all of its right title and


interest in each structure or installation (other than Movable items)


promptly following its receipt of such authorization or direction as to such


property. The Company shall also, as part of its closure responsibilities,


remove those structures and installations described in the Property List


pursuant to clause (i) of Section 26.2(a) and to which the Government has


title and those required Movable assets identified on the Property List and


to which the Government has title, in each case as lo which the


Government, within 90 days of receipt of such list, has directed the


Company to remove.


(c) The Company shall transfer to the Government, without charge, all of its


rights, title and interest in all Immovable property and Infrastructure that is


Movable that is described pursuant to clauses (i) and (ii) of Section 26.2(a)


within 10 days of the delivery of the Property List.


(d) If the Company wishes to sell to a third party (other than an Affiliate) any


Movable assets (except any Movable assets which are referred to in clause


(i) of Section 26.2(a) and ordinary office equipment, furnishings and


supplies and consumables reasonably expected to be consumed before the


Termination Dale) and any other information required for the full use or


operation or such Movable assets, it shall include such assets and


information in the Property List. For the avoidance of doubt, the Company


shall be permitted to transfer any Movable assets (except any Movable


assets which are referred to in clause (i) of Section 26.2(a)) to any Affiliate


on any terms without first offering them to the Government pursuant to


this Section 26.2.


(e) The Government shall have the first right of refusal to purchase the


Movable assets contained in the Property List in accordance with Section


26.2(f).


(f) The delivery of the Property List shall constitute an offer by the Company


to sell to the Government or its designee any or all Movable assets


contained in the Property List at a purchase price equal to the lesser of the


fair market value or depreciated book value of each such asset, on an “as is


V ; -- S>








and where is" btisis. If the Government docs not exercise such purchase


right as to any Movable asset included in the Property List by notice to the


Company within 60 days after delivery of the list, then the Company may


sell such asset to any Person for such price as it may be able to obtain


therefore or remove such asset from Liberia. If the Government exercises


its purchase right with respect to any Movable asset and related


information, it shall pay the purchase price within 90 days of the date upon


which such purchase price is established, against transfer by the Company


to the Government of all of its right title and interest in such Movable


asset.


(g) The Government, by notice to the Company within a reasonable period but


not to exceed one year after any termination of this Agreement, may


require the Company to dispose of in accordance with applicable Law any


Movable assets not sold to the Government that remain on Government


Land or in Mining Plant or Infrastructure that has been transferred to the


Government, if the Company doe ~not reasonably dispose of or remove


such asset or assets within a reasonable period after said notice, the


Government may effect such reasonable disposal or removal at the


expense ol the Company.


(h) Except in accordance with Section 26.2(i) and (j), no transfer to the


Government of any assets pursuant to this Section 26 with or without


compensation shall release the Company from any of its environmental


restoration or remediation obligations under this Agreement which exist as


at the date of termination of this Agreement.


(i) Subject to Section 26.2(j) below, following the termination of this


Agreement and prior to the transfer of any assets to the Government in


accordance with this Section 26, the Company, the Government and the


F.PA shall agree upon the nature and extent of the Company’s


environmental restoration or remediation obligations in accordance with


the agreed closure plan comprised in the EMP (as may have been updated


from time to time) (the “Final Closure Plan"), including such amounts


required to fund the Company’s obligations as set out in the Final Closure


Plan. Following the transfer of any assets pursuant to this Section 26 to


Ihe Government, subject to its obligations in the Final Closure Plan, the


Company shall have no further liability in respect of any environmental


restoration or remediation other than as provided for in the Final Closure


Plan. Once the Company shall have completed the Final Closure Plan it


shall provide a certificate of the Chief Executive Officer to the


Government as to its completion. If either the Government confirms its


agreement in writing or fails to provide within 9 months of the date of such


certificate a notice setting out in writing the areas where it considers that


the Company has not satisfied the obligations in the Final Closure Plan


then the Company shall have no further liability in respect of any


environmental restoration or remediation. In the event that the


Government provides such a notice then once the Company has completed


the items (or any dispute in respect thereof has been settled) then the


Company shall be entitled to recommence the process.


(j) I f the Government arranges for a qualified replacement operator to acquire


all of the assets on the Property List and to continue the operations of the


Mine, it will release the Company from its environmental restoration or


remediation obligations and amounts set aside for environmental


restoration and remediation shall be available to fund the environmental


restoration or remediation obligations of the replacement operator and the


Company shall have no further liability in respect of any environmental


restoration or remediation other than in respect of any obligations set out


in the Final Closure Plan save that the Company shall not be responsible


for any environmental restoration or remediation required as a result of the


continued operations of the Mine. In any such case, the Company shall at


the request of the Government transfer directly to such replacement


operator all assets otherwise to be transferred to the Government under this


Section 26.2, in the manner provided for in this Section 26.2, provided that


the Company is not obligated to transfer assets for which payment is


required under Section 26.2 except against payment of the purchase price


required by this Section 26.2.


(k) All right, title and interest in all Feasibility Reports shall automatically


vest in the Government, subject to the Company being able to use such


Feasibility Reports in connection with any obligations which survive


termination or any other projects in Liberia.


26.3 Special Provisions for Public Use Infrastructure.


To the extent the Company has built and is operating under its Mining License or


this Agreement facilities required by Regulations, this Agreement or other


applicable Law to be made available for use by third parties (such facilities could


include, by way of example and not limitation, highways, railroads, port facilities,


water supplies, electrical supplies, hospitals or schools), unless the Government


agrees otherwise with the Company, the Government may, in lieu of the


procedures set forth in Section 26.2, require (by notice to the Company withjn 90


days after the delivery of the Property List) the Company to transfer all of its right


title and interest, in and to any such facility (including all Movable Assets


normally used in conjunction with any such facility and all other information


required for the full use or operation of such facility) to a Person designated by the


Government, in the case of Immovable assets, without charge or, in the case of


Movable assets, for the purchase price attributable to such Movable assets and


related information determined as provided in Section 26.2(f), as applicable, on an


“as is and where is” basis. If the Government so designates a facility for purchase


by a third party, the third party shall pay the relevant purchase price within 90


days of the later of the date upon which such purchase price is established and the


date such purchaser is designated.


26.4 Certain Insurance and Maintenance Obligations of the Company.


The Company shall insure in accordance with the requirements of this Agreement


and maintain (in accordance with the requirements of this Agreement) the Mine,


all Mining Plant and Infrastructure and all Movable assets until (j) title is


transferred to the Government by the Company, where transfer of the property is


required under this Section 26 without action by the Government, (ii) payment is


to be made for such property under this Section 26, where such transfer is to be


made against payment by the Government or a third party following election of


transfer by the Government, or (iii) at such time as the right of the Government


under this Section 26 to elect to require the transfer of such property to it or a third


party has expired, in the case of property the transfer of which is not required by


the Government in accordance with this Section 26.


26.5 Determination of Movable Asset Fair Market Value.


Unless the Government notifies the Company that it disagrees with the


Company’s fair market value estimates for a Movable asset (and related


information) included in the Property List at or prior to the time it notifies the


Company of its desire to acquire such asset, the Company’s valuation shall be


final. If the Government does give notice of disagreement, fair market value shall


be determined by internationally recognized appraisal firm experienced in the


valuation of mining Movable assets, The firm will be selected by the


Government, but shall be from a list of three such firms selected by the Company


if the Company provides such list when it provides the Property' List. The costs of


the appraiser in respect of each appraisal shall be allocated by the appraiser and


shall be borne by the Company unless the valuation placed on the asset by the


appraiser is at least 95% of the valuation placed on the asset by the Company, in


which case the cost of the appraiser shall be by the Government. If the Company


is unable or fails to provide for the transfer of any information required for the full


use or operation of any Movable asset (or if for any reason the Government or a


purchaser designated by the government elects not to acquire and such


information), its fair market value shall be determined based on its value to a


Person who shall acquire in the marketplace the necessary information.


26.6 Disposition of Minina Plant and Infrastructure on Termination bv the Company.


(a) Upon a termination of this Agreement by the Company upon the


t occurrence and continuation of a Government Event of Default, all Mining


Plant and Infrastructure or installations of any kind (other than any


Movable items or any information related thereto) become the property of


the Government except to the extent the Government elects to transfer the


relevant Land to the Company. The right is reserved for any Shareholder


or the Company to submit a claim to arbitration for appropriate relief and


remedy.


(b) All Movable assets (and information related to the use or operation of such


Movable assets) shall be and remain the property of the Company. The


Company shall remove all such property front Land not owned or leased


by the Government within two years of the date of termination.


26.7 Miscellaneous.





In connection with any transfer of rights in property pursuant to this Section 26,


the Company shall execute such instruments of transfer sufficient to transfer all


right, title and interest of the transferor as the transferee may reasonably request.


 26.8 Liens.





Any transfer of property to the Government or a third parly pursuant to this


Section 26 shall be free and clear of Liens or other charges and encumbrances of


any kind arising out of any action or inaction of the Company or any Person


claiming by, through or under the Company (other titan any Liens granted


pursuant to and in accordance with Section 23.6).


26.9 Intellectual Property.





To the extent that any intellectual property is required for the full use or operation


of the Mine, Mining Plant and Infrastructure which is transferred to the


Government pursuant to this Section 26, to the extent the Company owns or has a


right to such intellectual property, so far as it is reasonably able to do so and


subject to any third party rights in relation to such intellectual property, the


Company shall grant a license or assign its rights to the intellectual property to the


Government. To the extent the terms on which the Company is granted the rights


to use such intellectual property prohibit its assignment without third party


consent, the Company shall use reasonable endeavors to obtain such consent on


behalf of the Government. “Intellectual property” includes trademarks, patent


licenses, copyrights, software, electronically stored data and “know-how”.


SECTION 27 MEDIATION; ARBITRATION





27.1 Mediation.





(a) Where any dispute, controversy or claim between the Government and the


Company or any Shareholder or Sesa Goa (the Company, Sesa Goa, and


any Shareholders) together, the “Investor Parties”) arising out of or in


relation to or in connection with this Agreement, including any dispute as


to its existence, interpretation, construction, validity or termination, the


rights or liabilities of the parties, the enforceability, performance, expiry,


termination or breach of the Agreerdent whether based on contract, tort or


otherwise (a "Dispute"), the Government and the Investor Parlies shall


attempt to reach an amicable settlement through mutual discussion. If,


notwithstanding the parties’ attempts, it is not possible to reach such a


settlement within 20 Business Days of one party giving the other parties


notice of the Dispute, the Dispute shall be first referred to a mediator to be


agreed upon by the Government and the Investor Parties. Mediation shail


commence by written notice from the complaining party or parties calling


for mediation, with a statement of its grievance, followed in 15 Business


Days after appointment of the mediator by a written response in writing


from the other parly (or parlies)stating its response to the grievance. The


complaining party may elect to file a reply within 15 days after receipt of


the response, but such reply shall be limited only to new facts raised in the


response. If the parties cannot agree upon a mediator within 30 Business


Days after service of the notice from the complaining party, the mediator


shall be appointed by the I,CIA.











3*


v


115


(b) The mediator .shall submil written nonbinding recommendation(s) to the


parties which shall include, but not be limited to, terms on which the


dispute, controversy or claim may be resolved or settled.


(c) Within 10 Business Days of the submission of the mediator’s


recommendations), both the Government and the Investor Parlies shall


submit to the other its written response to the recommendation(s), detailing


which items, if any, it accepts or rejects or which items, if any, it wishes


further direct negotiations within the context of the recommendation(s).


Where the mediator’s recommcndation(s) are rejected by either of the


parties and it is evident that further direct negotiations will not resolve or


settle the dispute, controversy or claim, the matter shall be submitted to


arbitration pursuant lo Section 27.2.


(d) No Dispute shall be submitted to arbitration before mediation has been


exhausted. T he cost and expenses of the mediator shall be equally borne


by Government and the Investor Parties.


27.2 Submission to UNC1TRAL Arbitration.


(a) Any Dispute between the Government and the Company not settled


pursuant to Section 27.1 shall be referred to and finally resolved by


arbitration conducted in accordance with the UNC1TRAL Rules. Any


such arbitration shall be administered by the LCIA.


(b) Unless the Government and the Company agree that any matter subject to


arbitration under this Agreement shall be referred for resolution by a single


arbitrator, any arbitral tribunal constituted pursuant to Section 27.2(a) shall


consist of three arbitrators appointed in accordance with the UNCITRAL


Rules. The Government and the Company shall each appoint one


arbitrator and the two arbitrators so appointed shall appoint a third


arbitrator who shall act as president of the arbitral tribunal. Where cither


the Government or the Company fails to appoint an arbitrator within 45


Business Days of being called upon to do so by the other party or where


the party-appointed arbitrators have not appointed a third arbitrator within


20 Business Days after the appointment of the second of them, either party


may apply to the LCIA Court to appoint that arbitrator.


27.3 Seat of Arbitration.


The seat of any arbitration conducted pursuant to this Agreement shall be London,


England and the proceedings shall be conducted in the English language. The


Government and the Company agree to submit irrevocably to the jurisdiction of


the English courts for the limited purpose of enforcing this agreement to arbitrate.


27.4 Single Arbitrator.


To ihe extent permitted by law or applicable arbitration rules, where this


Agreement provides, or if the parties agree that any matter subject to arbitration


under this Agreement shall be referred for resolution by a single arbitrator, the


parties shall promptly appoint such an arbitrator by agreement between them. In





/


the absence of agreement as to the choice of arbitrator, an arbitrator shall be


appointed by the LCIA Court. The decision of the single arbitrator shall be final


and binding unless appealed by any party to a full panel of arbitrators appointed as


provided in this Section 27, who shall examine the single arbitrator’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 unau.thorized act by


the single arbitrator.


27.5 Single Claim; No Concurrent Proceedings.


Concurrent arbitration proceedings shall not be permitted and all matters relating





to a Dispute, whether initiated by the Government, the Company, Sesa Goa, or


any Shareholder(s), shall be decided in a single proceeding. Whenever an


arbitration has been initiated before LCIA with respect to a Dispute, any


subsequent arbitration initiated with respect to the same Dispute shall be abated.


27.6 Special Provisions.





Any decision of the arbitrator(s) shall be public. Any monetary award shall be


assessed and payable in Dollars (determined at the Prevailing Market Rate of


Exchange if the award involved an obligation expressed in any currency other


than Dollars). The arbitrators may not award specific performance or similar


equitable remedies against the Government. No party shall have any liability for


either consequential damages or exemplary or punitive damages. Enforcement of.


any UNCITRAL award shall be in accordance .with the provisions of the New


York Convention.


27.7 Exclusive Remedy





Failing mediation, arbitration hereunder shall be the parties’ exclusive remedy and


no party to arbitration shall be required to exhaust any local administrative or


judicial remedy.


t


27.8 Severability


The provisions of this Section 27 shall be severable from the remainder of this


Agreement and shall remain in full force and effect notwithstanding any


cancellation or termination of this Agreement.


27.9 Shareholder Benefit and Appointment and Government Acknowledgement.





(a) Any Shareholder shall benefit from the rights conferred on the Company


under this Agreement, including but not limited to under this Section 27,


and shall be entitled to be a party and to make claims in its own name in


any arbitration under this Agreement and to all the remedies that would be


available to the Company and the Government hereby acknowledges and


consents to any Shareholder having such rights. Whether advanced in the


name of any Shareholder or the Company, only a single claim may be


made with respect to any Dispute under this Agreement and any award


shall be limited by the amount that the Company could claim for breach of


this Agreement.


£f





117


(b) The Company hereby irrevocably appoints any Shareholders), jointly (but


not severally), to act on its behalf with respect to all matters pursuant to


this Section 27. Such appointment shall include the right to initiate,


conduct, manage, and settle any and all aspect of any arbitration pursuant


to such Section, and the Government hereby acknowledges and consents to


such appointment.


(c) Any Shareholder may transfer its interest in the Company (including a


Controlling interest in the Company) in accordance with this Agreement,


in which case any new Shareholder shall enter into a deed of adherence to


this Agreement in the form set out in Exhibit 8 and the Company and the


Government acknowledge and agree that any new Shareholder's entry into


such a deed of adherence shall constitute a written arbitration agreement


between Ihe new Shareholder, the Company and the Government on the


terms set out in this .Section 27.


SECTION 28 NOTICES


28,1 Written Communications.


All orders, approvals, declarations and notices of any kind between the parties


(hereinafter each referred to as a •‘Communication”) shall be in writing and


delivered by hand, by fax, by electronic mail, by postage prepaid registered mail,


by. prepaid internationally recognized courier service, or by any other means of


communication agreed upon in writing by the parties. Communication by fax or


electronic mail is valid under this Agreement only to fax numbers or electronic


email addresses set forth below or identified as acceptable to a party by notice to


the other party pursuant to this Section 28. A Communication other than an


electronic mail shall bear an original or facsimile reproduction of the signature of


a representative of the sending party responsible for such Communication and all


Communications shall indicate the identity of such representative and state how


he or she may be reached by telephone and, if practical, electronic mail. A


Communication under this Agreement is not effective until delivery.





28.2 Delivery.





Subject to Section 28.5, delivery of a Communication to a party shall be deemed


to have occurred in any one of the following circumstances:


(a) Fax confirmation of receipt is electronically issued to the sender by the fax


receiving device.


(b) Electronic mail confirmation of receipt originated by the recipient is


received at the electronic mail address of the sender.





(c) Written confirmation of receipt is received by the postal or courier service


delivering the Communication.


(d) The recipient has otherwise directly or indirectly acknowledged receipt of


(e) Verification of receipt of the Communication has been obtained in any


manner specifically agreed to in writing by the parties. Other confirmation


of receipt acceptable to the recipient is obtained by the sending party.


28.3 Addresses.


All Communications from the Government to the Company shall be addressed as





follows:


Project Director


Western Cluster Limited


HG Plaza Building


Sckou Toure Avenue


Mamba Point


Monrovia. Liberia


Email: aiviir@cnaclinvesi.coni and suresh.singh@vedanta.co.in


With a copy of all communications alleging or relating to any failure of a party to


this Agreement to comply with the terms of this Agreement to:





Pierre, Tweh & Associates


Suite 201, Palm Hotel Building


Broad & Randall Streets


Post Box .25.36


Monrovia, Liberia


Email: PierreTweh@hotmail.com





And





Email: alon@cngclinvest.com and aal@csulaw.co.il


All Communications from the Government to Elenilto shall be addressed as


follows:


160 Greenlrec Drive, Suite 101


Dover, Kent County


Delaware, US 19904


Attention: Company Secretary





Email: alon@engelinvest.com. Jacob@engclinvest.com, and


gal@csulaw.co.il


With a copy of all communications alleging or relating to any failure of a party to





this Agreement to comply with the terms of this Agreement to:





Pierre, Tweh & Associates


Suite 201, Palm Hotel Building


Broad & Randall Streets


si Box 2536








119


\ •


Monrovia, Liberia


Email: PierreTweh@hotmail.com


And


Email: alon@cngelinvest.com and gal@csglaw.co.il


All Communications from the Government to Bloom shall be addressed as


follows:


Address: c/o Multiconsult Ltd.,


Rogers House,


5 President John Kennedy Street,


Port Louis,


Mauritius


Fax number: +230 212 5265


Attention: Akhtar Janally / Lovy Bundho


Email :Akhtar.Janally@cimglobalbusiness. com/


Lovy.Bundhoo@cimglobalbusiness.com








With a Copy to Sesa Goa at the address and details mentioned below


All Communications from the Government to Sesa Goa shall be addressed as


follows:





Address: Sesa Ghor,


Patto, Panjim,


Goa, India 403 001


Fax number: +91 832 246 0816


Attention: Mr. P.K. Mukherjee


Email: pkm@vedanta.co.in and sushil.gupta@vcdanta.co.in


All Communications from the Company, Sesa Goa, and/or any Shareholder to the


Government shall be addressed as follows:





The Minister of Lands, Mines and Energy


Ministry of Lands, Mines and Energy


Capitol Hill


Monrovia, Liberia


And





The Minister of Finance


Ministry of Finance


Broad Street


Monrovia, Liberia


 And





The Chairman, National Investment Commission


National Investment Commission


12th Street Sinkor


Monrovia, Liberia


With a'Copy of all communications alleging or relating to any failure of a


party to this Agreement to comply with the terms of this Agreement to;


The Minister of Justice


Ministry of Justice


Ashmun & Center Street


Monrovia, Liberia


28.4 Change of Address.


Any party may, upon prior notice to the other party, at any time change the


designation of a Person named to receive Communications under this Agreement,


or the address or fax number of the office in Liberia or elsewhere authorized to


receive such Communications.


28.5 Quantities.


All notices, reports, applications, feasibility reports and related plans and


documents, financial statements and similar materials furnished to the


Government by the Company under this Agreement shall be delivered to each


Government addressee provided for under Section 28.3 or Section 28.4 (but not


more than live addressees at any one time) in duplicate paper copies, and, if more


than six pages long, shall be accompanied by a reproducible electronic copy in


Microsoft Word or Adobe PDF formal that is compatible with versions of such


program that have been readily available in Monrovia for at least 36 months. The


Government may change the required electronic data format for such documents


to any other readily available format on at least 60 days prior notice to the


Company.


SECTION 29 FORCE MAJEURE


29.1 Application.


In the event of a party being rendered unable, in whole or in part, by Force


Majcure to carry out any obligation under this Agreement, other than an


obligation of the Company to make payments of money to the Government, the


party shall give notice and the particulars of such Force Majeure in writing to the


other party as soon as practicable after the occurrence of the cause relied on.


Thereafter, any obligation of the party giving such notice that such party is unable


to carry out because of such Force Majeure shall be suspended during the


continuance of any such inability so caused, but for no longer period. The party


giving such notice shall take all reasonable steps to mitigate such disability with


all reasonable dispatch. All time periods specified in this Agreement for the


performance of obligations or the enjoyment of rights that are affected by Force


*








121


Majeure, oilier than obligations for the payment of money, shall be extended until


the effect of such Force Majeure is remedied as above provided or otherwise


ceases, However, the Term and all Mining Terms shall be extended as a result of


an event of Force Majeure if and only if such event causes the stoppage of


substantially ail of a material part of Operations.


29.2 Definition.


The term “Force Majeure” as used in this Agreement shall mean acts of God,


accidents, wars, acts of war, invasions, acts of public enemies, hostilities (whether


war is declared or not), restrictions on trade or other activities imposed by any


sovereign nation or state, embargoes, blockades, revolutions, riots, civil


commotions, acts of terrorism, sabotage, strikes and/or other industrial, labor or


employer-employee disputes (if not cured for a period of more than two months),


fires, explosions, earthquakes or any other natural disasters, expropriation of


facilities or goods, epidemics, public health emergencies and any similar cause,


provided any such cause was not within the reasonable control of the parly


claiming the benefit of Force Majeure and could not have been avoided or


overcome by such party through the exercise of due diligence.


29.3 No Required Settlement,


Nothing in Sections 29.1 and 29.2 above shall, in and of itself, be construed to


require the Company to settle any strike, lockout or other labor or industrial


dispute.


29.4 Termination As a Result of Force Maieure.


The Company shall be entitled to terminate this Agreement and shall have no


further obligations under this Agreement if the circumstances giving rise to a


Force Majeure event are continuing for a period of more than 360 days, provided


that the Company has notified the Minister of such fapt, following which the


Agreement shall terminate 180 days following such notification being sent to the


Minister.


SECTION 30 GOVERNING LAW


30.1 Applicability of Liberian Law,


Except as explicitly provided in this Agreement and the Revenue Code, the


Company shall be subject to ail of the internal laws of Liberia as in effect from


time to time, including with respect to labor, environmental, health and safety,


customs and tax matters.


30.2 Construction and Interpretation.


This Agreement and the rights, obligations and duties of the parties hereunder


shall be construed and interpreted in accordance with Liberian law.














\ I


 SECTION 31 PERIODIC REVIEW





31.1 Profound Change iit Circumstances.


For the purpose of considering Profound Changes in Circumstances from those





existing on the Effective Date or on the date of the most recent review of this


Agreement pursuant to this Section 31.1, the Government on the one hand and the


Company on the other hand, shall meet once every five (5) years after the date


hereof or earlier, if one parly reasonably considers a Profound Changes in


Circumstances to have occurred, to establish whether or not a Profound Changes


in Circumstances has occurred. To the extent that a Profound Changes in


Circumstances has occurred the parties shall enter into good faith discussions to


consider such modifications to this Agreement as they may in good faith agree are


necessary. The parties shall effect such modifications to this Agreement that the


parties agree are necessary.





31.2 Other Consultation.


In addition to the consultation and review provided by Section 31.1, each party





may at any time request a consultation with the other party with respect to any


matter affecting the rights and obligations of the parties pursuant to this


Agreement or any matter relating to Operations. The parties shall meet to review


in good faith the matter raised as soon after such request as is reasonably


convenient for them both. Subsequent to such consultation, the parlies shall take


such action, if any, that is mutually agreed to address the matter, subject to the


requirements of Section 33.3.


SECTION 32 WAIVER OF SOVEREIGN IMMUNITY





The Government hereby irrevocably waives, in relation to any dispute arising in


connection with this Agreement, whether relating to acts of a sovereign or


governmental nature or otherwise, all claims of immunity from the j urisdiction of,


and from the enforcement of any arbitral award rendered by, an arbitral tribunal


constituted pursuant to this Agreement as well as all claims of immunity from the


service of process or the jurisdiction of any court situated in any state, country or


nation in aid of the jurisdiction of such arbitral tribunal or in connection with the


enforcement of any such award.


SECTION 33 MISCELLANEOUS





33.1 Where Payments to Government are Made.


Unless this Agreement expressly provides otherwise, all amounts payable by the





Company to the Government under this Agreement shall be paid to the Ministry


of Finance for deposit in the general revenues account of the Government against


delivery of a receipt or other official document evidencing payment of the amount


and the purpose for which paid.











42-


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123


33.2 Entire Agreement.





This Agreement, including the Schedules and Exhibits attached to it, represents


(he entire agreement between the parties and shall with effect from the Effective


Date, supersede all previous oral and written negotiations and agreements between


the parties.


33.3 Amendment and Interpretations.


Any modification or amendment of this Agreement shall be by the mutual written


agreement of the parties (with the Minister, the Minister of Finance, Minister of


Justice and the Chairperson of the National Investment Commission, or such other


persons as may be notified by the Government to the Company, acting for the


Government) and shall not become effective until (i) approved by the President of


the Republic and (ii) (except for non-material modifications and amendments),


approved by the Legislature. Interpretations of this Agreement agreed to by the


parties which affect the determination of amounts due under this Agreement are


not valid and do not bind the Government unless the Minister of Justice and


Minister of Finance have consented thereto in writing.


33.4 Limitation of Liability.


Neither party shall have any liability under this Agreement for consequential


damages or any form of exemplary or punitive damages.


33.5 Non-Waiver of Rights.


Either party may (i) extend the time for the performance of any of the obligations


of the other party, (ii) waive any inaccuracies in the representations and warranties


contained herein or in any document delivered pursuant hereto, or (hi) waive any


non-compliance by the other party with, or default by the other party under, any


provision of this Agreement, provided that such extension or waiver shall be in


writing. In the case of fhe Government, any such extension or waiver shall be


executed by the Minister, the Minister of Finance, Minister of Justice, and the


Chairperson of the National Investment Commission, or such other persons as


may be notified by the Government to the Company, provided that, save as


expressly set out in this Agreement, any such extension or waiver that, if given


effect, would modify any provision of applicable statutory Law (other than this


Agreement), shall not become effective until, in addition, it is approved by the


Legislature. The non-exercise or partial exercise by one or the other of the parties


of any of its rights under the terms of this Agreement shall not in any case


constitute a waiver of that right. Without prejudice to the generality of the


foregoing sentence, the failure of the Government to make any inspection


described in this Agreement or provided for under applicable Law or ascertain in


any such inspection the existence of any breach by the Company of any of its


obligations under this/Agreemcnt, any plan described in Sections 5.4 through 5.6


or applicable tawfehall pot affect the ability of the Government to require full


compliance by tte'fcompany with such obligations.


 \


\











33.6 Third Party Beneficiary


Apart from the Government, the Company, Sesa Goa, and the Shareholders, as





provided in Section 27.9, no Person shall have any rights under this Agreement.


33.7 Assignment and Succession.





The terms and conditions of this Agreement shall inure to the benefit of and be


binding upon the successors by operation of law and permitted assignees of the


parties including in the case of the Government, all future manifestations or forms


of public power exercising sovereign authority over all or part of the present


territory of Liberia.


33.8 Survival.





Notwithstanding termination of this Agreement by any party or for any reason,


including a termination due to a finding that this Agreement or a portion thereof is


void, invalid, or unenforceable, Section 1, the final sentence of Section 19.8(c),


Sections 20.1, 20.5, 20.6, 22, 25.7, 26, 27, 28, 30, 32, and this Section 33, all


liabilities of either party accruing prior to such termination and all closure


management and environmental remediation, restoration or reforestation


obligations of the Company under this Agreement or each EMP shall survive such


termination. Moreover, any such termination shall be without prejudice to rights,


duties and obligations of either party that have accrued prior to termination and,


notwithstanding such termination, such provisions of this Agreement as are


reasonably necessary for the full enjoyment and enforcement of such accrued


rights, duties and obligations shall survive such termination for the period


necessary.





33.9 Severability.


Should any Section of this Agreement, or any provision or term of any Section, be





found, pursuant to Section 27, to be void, invalid or unenforceable, in whole or in


part, then the remaining Sections, and those unaffected provisions or terms of any


other Sections which contain some void; invalid or unenforceable provisions or


terms, shall nevertheless remain valid and subsisting and shall be construed as if


this Agreement had been executed without such void, invalid or unenforceable


Sections, provisions or terms. Any otherwise void, invalid or unenforceable


Section, term or provision of this Agreement shall be so construed, or reformed, as


to alter, amend or change any such term, provision or condition to the extent


necessary to render it valid, lawful and enforceable, while also giving maximum


effect to the parlies’ originally intended purpose or result, short of creating any


void, invalid or unenforceable provision, term or condition.


33.10 Publication.





The Government shall make public this Agreement and any amendments or


written interpretations of this Agreement.

















\c


125


33.11 Counterparts.








This Agreement may be signed in any number of counterparts, each of which shall





be an original, with the same effect as if the signatures thereto and hereto were


upon the same instrument.


IN WITNESS WHEREOF, the parties have signed this Agreement, through their


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








Signed in ten (10) originals on the 3rd day of August, 2011.











FOR THE GOVERNMENT OF THE REPUBLIC


OF LIBERIA





i





By: " J


THE MINISTER OF LANDS, MINES AND


ENERGY


















































ATTESTED BY:











THE MINISTER OF JUSTICE











FOR THE COMPANY;








By: MR. AMIR NAOAMfyTY








DULY AUTHORISED REPRESENTATIVE


 FOR BLOOM:














By: MR. P. K. MUKHERJEE


DULY AUTHORISED REPRESENTATIVE








FOR SESA GOA:











By: MR. P. K. MUKHERJEE





DULY AUTHORISED REPRESENTATIVE









































REPUBLIC OF LIBERIA


 SCHEDULES AND EXHIBITS








Schedule 1 - Description of Exploration Area


Schedule 2 - Description of Pre-Feasibility Study Activities


Schedule 3 - Shareholders, Affiliates and Related Matters


Exhibit 1A Form of Mining License





Exhibit IB Form of Mineral Exploration License


Exhibit 2A Parent Guarantee


Exhibit 2B Form of Exploration Guarantee


Exhibit 2C Form of Mining Guarantee


Exhibit 3 Other Approved Fiscal Provisions


Exhibit 4 The Pricing Agreement (To be attached after Effective Date


Exhibit 5 pursuant to Section 15.3(c)


[RESERVED]


Exhibit 6 - Principles Relating to Community Funding


Exhibit 7 - Intermediate Inputs and Consumables....


Exhibit 8 Form of Deed of Adherence


Exhibit 9 - Port Lease (including map of leased area in Port) (To be provided


after Effective Date when Port Lease is negotiated and executed.


Exhibit 10A - Sec Section 6.7(j)


Map of Railroad Corridor to Monrovia Port


Exhibit 10B - Map of Road Corridor to Monrovia Port (To be prepared by the


MOPW and attached to this Agreement as an exhibit when it has


Exhibit 11A - been approved by the MOPW pursuant to Section 6.7(b))


Form of Escrow Release Notice


Exhibit 1 IB - Form of Document Release Notice























a





SCHEDULE 1





Description of Exploration area





The Exploration Areas are as follows: (a) map of Bomi Hills, Bea Mountain and Mano River














MINISTRY OF LANDS,MINES, & ENERGY


REPUBLIC OF LIBERIA /


WBOTIRN IRON ORB CLUSTERS








Legend


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idamfii


(b) map of 2nd exploration area at Mano River





The details of the Additional Exploration Areas in Mano River are as follows:











PLOT OF THE WESERN CLUSTER AREAS
































Legend


• Voices


-tCSrmfl


•• - Hrrtf ,


90

P'^irtirr <09t


v------- I'avMwt'rBYiodO


jweae* CWsTenM Arsu


IMttfein Cbsta AvtabUs AcBIcrjaJ Ajea (Arcs * 1 520 77 ftnaares


fyrJflfcWm Jt


Coordinate* Is ter AddJ tonal Area


Vertices East in* NortWn*


0 264990 804983


1 26C007 804946


2 259970 806556


3 264016 810003


4 264000 807000


5 264952 806958


6 264990 804983





Pree*rWWy DV6RAIIUE


Oi!e 4(fl 79.200


 SCHEDULE 2


DESCRIPTION OF PRE-FEASIBILITY STUDY ACTIVITIES





This section comprises a summary of the exploration / PFS work programme envisaged by


the Company. It is intended to illustrate works planned and should not be interpreted as


exhaustive or comprehensive.


1.1 Description of Exploration Activities Planned:


The exploration work programme described in this section 1 comprises one key component


of a Pre-Feasibility Study on the Western Cluster iron ore project, leading to the generation


of a CRIRSCO-compliant Indicated Resource estimate.


The PFS report for the Bomi and Mano River Deposits will be completed in the 1st phase and


a copy will be provided to the government no later than the second anniversary of the


Effective Date, while the PFS for the Bea Mountain Deposits will be completed and a copy


provided to the Government no later than the third anniversary of the effective date. PFS


studies typically allow the project owner to evaluate and select the most economically and


technically viable option for project development, with 5-15% of engineering completed,


project specific cost estimates with an accuracy of ±20% and 15-20% Contingency. A


detailed description of the scope of work for the generation of the resource estimate and for


the remainder of the PFS is presented at section 2.


The primary objective of the exploration work programme presented in this section, is to


generate CRIRSCO-standard Indicated Resource estimates at Bomi, Mano River and Bea


Mountain Deposits.


12 Drilling:


Detailed work program will be developed and estimation of the drilling required to establish


Indicated Resources according to the definitions in the CRIRSCO reporting Template will be


made. The number of holes and proposed drilled meterage by area will be recorded. Holes


will be drilled via a combination of diamond drilling (DD) and reverse circulation (RC)


drilling.


1.3 Airborne Magnetic Survey:


Company plans to engage magnetic survey over the deposit area to identify potential iron


bearing zone for planning of detailed exploration drilling program. The objectives of this


survey are i) to provide high resolution geomagnetic imagery to Locate the outcrop of


Mineralization in the deposit area more accurately it) to provide rigorous geomagnetic data


for regional geological interpretation iii) to generate a digital elevation model, corrected for


forest cover and iv) to generate aerial photographic imagery for use in environmental and


social baseline studies.


1.4 Ground Magnetic Survey:


Company plans to conduct limited ground magnetic survey at Deposit Locations with the


objective of providing information to assist with the location of drill-hole collars prior to the


receipt of airborne magnetic data, as well as providing information to assist interpretation of


the depth extent of the mineralisation at Deposits.





v


1.5 Metallurgical Testing:


Company plans to conduct orientation mineralogical analysis of samples from drill cores.


This analysis will include i) quantitative X-ray analysis of mineral content (XRD), ii)


petrographic analysis, iii) mineralographic analysis, iv) optic-gcometrical analysis, v)


spectroscopic analysis, and vi) Mdssbauer Spectroscopy. The results of this orientation


mineralogical study will provide guidance for the detailed design of the follow-up optical


mineralogy studies planned during subsequent metallurgical testing. Bench-scale


metallurgical testing will be completed on large (c. 400 kg) samples.


1.6 Analytical Works:


The sample preparation and analytical methodology will be based on input from international


consultants. Davis Tube Recovery' (DTR) methodology will be used to ensure the


methodology facilitates extraction of maximum- information from Deposit samples. The


sample preparation and analytical methodology will comprise of i) sample preparation, with


different approaches used for different ore type samples, ii) major element geochemical


analysis, iii) DTR testing of samples, and iv) deleterious trace element determination on DTR


concentrate composites.


1.7 Exploration Infrastructure:


Proper Exploration infrastructure will be created to operate an exploration camp comprising


i) diesel fuel storage facility, ii) light vehicle workshop, iii) wells and pumps, iv) site


security infrastructure, v) senior staff accommodation, vi) junior staff accommodation, vii)


office block-building, viii) kitchen / mess block building, ix) VSAT communications


equipment, x) core shed for core cutting, sample preparation and core storage, xi)


containerised water treatment plant, xii) containerised sewage treatment plant, xiii)


incinerator, and xiv) over 600 kVA of diesel generating capacity. Company will provide


laundry, room cleaning and 3 meals i day for camp residents, as well as a casual meals


service for temporary labourers recruited from the surrounding villages, and also provide


office cleaning services and operate a camp shop and cash bar.


2. Scope of Work for PFS, Including Evaluation of processing, transportation and


export of iron ore from free port of Monrovia


Company intends to evaluate the Western Cluster iron ore project in two stages:


i) A Prefeasibility Study (PFS) which shall satisfy the requirements of this Agreement, and


during which all alternative project concepts are assessed in sufficient thoroughness that


company can commit to a single project option that provides a viable, low risk business case,


for which further information would need to be gathered and assessed during a DFS.


ii) A Definitive Feasibility Study (DFS) which shall satisfy the requirements of this


Agreement, and during which the project is assessed in sufficient thoroughness that company


could subsequently commit to the project, subject to it meeting company’s investment and


other criteria. This DFS should be completed to the standard expected by international


financial institutions and their technical advisers.


In this section is described a typical PFS scope of work for an iron ore project in Liberia,


which is likely to be applied to the Western Cluster iron ore project. This description is not


presented as being cither exhaustive in scope or complete in its detail. It should also be read


in conjunction with section 1 above, which outlines the exploration works planned by


company to generate data for a CRIRSCO-compliant indicated mineral resource estimate,


which is a key component of the PFS.


2.1 Scope of Pre Feasibility Study


The manner of execution of the pre feasibility and feasibility stages of a project and their


scope extent can have a profound impact on the successful outcome of the project,


Adequate investment in these phases is necessary to ensure success. A PFS typically


addresses the following factors relating to the development of a mining Project i.e. i) strategy


and market analysis, ii) assessment of the likely technical and Economic viability of a set of


alternative mining, process, location, capacity and project configuration alternatives to


determine the preferred alternative for a DFS, iii) determination of the material risks, key


value drivers and risk/reward profile, iv) a description of the alternatives and final


recommendation, and v) development of a work plan, schedule, cost, resources and services


requirements necessary to undertake project development through the feasibility study to


implementation. The PFS report will typically contain the chapters described in the following


sections plus an executive summary that clearly summarises the content of the study report in


a concise manner and presents the project strategy and recommended project configuration to


be studied further in the DFS stage.


2.2 Market Analysis


The objective of this work is to support Company’s PFS with an overview of the current and


projected global iron ore industry - its products, suppliers, customers and cost drivers and


the positioning of Western Cluster iron ore products in that competitive .environment. This


overview will include i) industry competitors, ii) market overview and iii) industry cost


drivers. The data presented will be drawn together and some concluding remarks offered


which detail both the historical and future attractiveness of the iron ore industry with


particular focus on the dynamics of the Atlantic Basin. A marketing and pricing strategy for


the Western Cluster iron ore products will be presented.


2.3 Geology and Mineral Resources


Company will continue to load and maintain a comprehensive electronic database that


contains records of numerous attributes of geological samples, as well as results of tests to


establish the quality (accuracy and precision) of the geological data, and metadata recording


test methods, batch numbers, limits of detection, etc. The contents of the geological database


will be reviewed against original survey records, geological logs, and laboratory reports to


establish the reliability of the information within the database. The geological data will then


be interpreted and the sequence subdivided into rock units that are meaningful to mining and/


or mineral processing, and are as mineralogically and grade homogenous as possible. The


spatial distribution of these rock units will be interpreted, and samples assigned to these units.


The data from samples within each unit would then be assessed to establish the characteristics


of the unit, and the distance over which grades are statistically related within each unit (i.e.


geostatistics).


A digital cellular resource model will be created that contains estimates of rock type, grades


of mineralisation, and density of all rocks, for all rock units in the proposed volume to be


mined. This resource model will be the basis for estimates of Mineral Resources, and mine


design leading to estimates of Mineral Reserves. The estimates of Mineral Resources will be


classified according to definitions in the CRIRSCO reporting template.








''N


 2.4 Mining


The PFS will investigate and report on a number of alternative scenarios to generate


preliminary mine development plans to exploit the Western Cluster iron ore resource. The


aim is to narrow down the process and productivity alternatives into a single business case.


The level of detail required in the study must be sufficient to ensure the alternatives are


correctly ranked and the one selected scenario will deliver the best possible outcome.


The mine planning activities undertaken as part of the PFS will include provision of i) an


overall description of the site layout, ii) a summary description of the key issues in describing


the geological resource, including a description of tire geological block model, material


characteristics and resource estimate, iii) the key geotechnical parameters and hydro


geological considerations including wall stability, surface and groundwater conditions etc. iv)


an understanding of the main environmental and cultural considerations, and v) a summary


description of the assumptions used to generate a mine design to a high level of confidence


(basis of design document), including the main economic criteria to be applied to the project,


process recovery and marketing. The mining methods being considered will be then be


discussed and defined, The first task in the execution stage of the PFS will be to generate a


mineable resource model, taking into account such factors as cut-off grade, ore dilution and


ore recovery. This model will be used as the basis for the pit optimisation strategic study. The


assessment of the model and project requirements will assist in the definition of the mine


production rate for each of the alternative options. The preliminary definition of ore and


waste will follow. Based on reference to physical and economic parameters, a high level pit


optimisation assessment will be undertaken. Once the optimum pit shells (including cut-back


sequence) have been selected, a strategic approach to pit development will follow. An


indicative pit design with mineral inventory statement will be created, Scheduling of the mine


will provide a practical mine production sequence for the development of the deposit. The


PFS will also investigate the waste and overburden removal strategy and stockpile and dump


designs. The task then is to investigate the material handling alternatives to establish truck


fleet or other material handling configurations. The operating and capital costs will then be


estimated and will include high level manning and infrastructure requirements. A summary


list of the mine equipment requirements will be made for each alternative, to suit the


production constraints and mining method.


The alternative scenarios will then be tabulated and assessed with trade-off studies to arrive at


a single “go forward” recommendation from the study. Technical risks associated with the


mining aspects of the operation will then be discussed, A future work Program will then be


defined to further evaluate the recommended alternative.





2.5 Mineral Processing


The PFS will investigate and report on the various alternatives considered and the decision


making process applied to determine the single, “go forward”, DFS case. The level of detail


and depth of study required must be sufficient to ensure that the selected DFS case will lead


to the most valuable outcome for Company giving full consideration of the risk vs. reward


context.


A number of flow sheet options will be developed for the PFS. The study will examine all of


these options and any others that might arise in sufficient detail to enable a decision to be


made as to which should become the base case for the DFS. In doing so the following factors,


amongst others, will be considered; ore characteristics, test work results, environmental


impacts, capital and operating costs.


In the initial stage of the PFS the process design team will liaise with geologists and mining


engineers to develop a preliminary product grade model to be used in pit optimisation


exercises. Using the preliminary basis for design document prepared from the metallurgical


test work programme as a starling point, the process design will be developed to provide for


each option, preliminary; design criteria, flow diagrams, mass balance, equipment sc! ns,


description and costs. The prediction and control of final product quality is a key element of


the design which involves close cooperation between mining and process engine'; -. The


planning of mine schedules, crushing campaigns, mine stockpiles and port stockpiles will be


conducted as an iterative exercise. The PFS report will contain a description of the


development of the final recommended flow sheet clearly demonstrating how the flo\. sheet


was derived from metallurgical test work data, experience at other mines and financial


evaluation.


A review of available information will be undertaken by the PFS engineering conlnctor to


identify key site information including i) geological setting, ii) climatic setting, iii)


Hydrological setting, iv) topographic data, and v) local and regional infrastructure. The


results of the review will be referenced in conjunction with project requiremt. as ,md


constraints identified by company and the PFS engineering contractor to identify a preferred


Plant location and site layout.


A preliminary geotechnical investigation will be carried out to assist in the selec ion of


suitable locations for plant and infrastructure facilities and to provide preliminary data for


foundation and structural design,


Based on the process mass balances equipment selections and sizing will be determined for


each option and a mechanical layout prepared. Preliminary 3D models will be dev-.; -ped


including mechanical equipment layout and arrangement, structural elements and piping.


Material quantities derived from these models and from preliminary engineering designs will


be used in capital cost estimating. Preliminary power generation, distribution and control


designs will be prepared. The plant operating, manning and control philosophies will be


agreed which provide input to the capital and operating cost estimates.


2.6 Railroad Infrastructure:


Rail road infrastructure, specifically road and rail access to the project site is a key


component of the project and will require assessment during the PFS. Work will include


surveying and mapping, geological and geotechnical, and bathymetry and coastal engineering.


Preliminary environmental and social impact statements.


All options for the ore transport from plant to port will be explored. The PFS engineering and


cost estimates will be developed to the extent that a single preferred option can be identified.


The PFS scope of work for the railway will include i) a desktop review of existing


documentation and identification of route selection constraints including any cadastral,


geotechnical, hydrological, community and environmental issues, ii) the assessment and


selection of preferred routes, including survey and measurement where necessary, iii)


conceptual civil design for the preferred routes, typical formation designs, hydrological


assessment of major creek crossings and preparation of drawings with typical bridge and


culvert details where required, iv) identification of track ballast source(s), v) calculations of


optimum train sets required including assessment of commercial viability of both bulk cargo


and passenger / non-bulk cargo services, vi) preliminary design of mine and port marshalling


yards and loading/unloading facilities and signalling, communications and control systems,


and vii) preliminary assessment of operations and maintenance requirements.


The PFS scope of work for the port facility will include i) a review' of existing hydrological,


geological data and facilities available at the Monrovia Port iii) a review of the inlet channel


and a preliminary estimate of dredging requirements, iv) an optimised vessel size using the


port, and v) a preliminary design of the quays and jetty. Also the land area required for


handling, storage and ship loading facilities as required to support planned volumes of export.


The PFS scope of work for site infrastructure engineering will include evaluation of i)water


supply, storage and reticulation, ii) sewage collection and treatment, iii) a site layout plan, iv)


site earthworks and drainage, vi) tailings storage facility, vii) accommodation, viii)


industrial buildings, ix) power supply.


2.7 Human Resources


The PFS will include an examination, at a high level, of the Human Resources (HR) issues


associated with the operational philosophy and management strategies identified for the


project. Issues to be addressed include organisational philosophy and model, cultural fit,


skills requirements, employee relations, recruitment and training and the statutory


environment. Cost estimates for initial recruitment and training and ongoing HR related


activities will be prepared and included in the financial evaluations.


2.8 Project Execution


The PFS will develop and describe a recommended project execution approach; it should


describe the alternatives considered and clearly explain why the recommended approach has


been selected. The preliminary project execution plan will address project scope, design


criteria, product specifications, quality controls and key safety, health, environmental and


security issues. A facility and package work breakdown structure will be developed as a basis


for engineering, estimating and cost control. A recommendation will be made on the


approach to engineering and the standards to be applied. Execution methodologies and


contracting strategies will be examined and a preferred selection made which will form the


basis of the PFS and subsequent DFS. This will include procurement and contracting


strategies for execution, equipment and consumables. A high level project development


schedule showing major DFS, engineering, construction, commissioning, start-up and ramp


up activities will be developed.


2.9 Operations Management


The PFS will address the establishment, commissioning, start up and operating needs of the


project in terms of the operating philosophy, owner or contractor, organisation and


consequent labour, industrial relations and logistical requirements. Specific issues to be


addressed include organisational structure, resources required and source/conditions of


employment, accommodation, transport logistics and administration.


2.10 Information Management


During the PFS stage the information management and technology requirements of the


project during both the execution and operating phases will need to be addressed.


Preliminary plans and systems will be developed for the capture, sharing and transfer, back¬


up and security of data, information and knowledge.


2.11 Health, Safety', Environment and Community


For a PFS the role of the environmental and social impact team members is to better define i)


the environmental legislation and international guidelines the project will need to comply


with, ii) the environmental and social footprint for the project, iii) the key environmental and


social risks, and iv) finally to communicate the findings and recommendations for


management measures to the project engineering design team. This will allow environmental


and social issues to be identified early and incorporated into environmental and social design


criteria and environmental and social management plans for the project.


At the PFS stage it will be important to gain a thorough understanding of the legislative


framework as it applies to environmental and social aspects of major projects such as this.


This will enable .‘itraiegies'plans lo be developed and implemented with respect to gaining


access and tenure to the required deposits and land and achieving government approval for


the project. In addition to meeting the environmental legislation requirements of the


Government of Liberia, it is considered best practice to also match the guidelines issued by


international agencies, in particular the World Bank’s (WB) Equator Principles and the


International Finance Corporation’s (1FC) Performance Standards, The 1FC requirements


must be complied with if finance is sought from an Equator Principles financial institution.


The PFS stage of a project is when information and data relating to the environmental


and social footprint of the project is collected. This information will be collected through


initial baseline studies, as well as through ongoing environmental monitoring of the project


activities, over the duration of the exploration phase of works. In order to fully assess the


environmental impacts of the project will be necessary to have data available that represents


the environmental baseline prior to commencement of development activities associated with


the project. It is anticipated that there is minimal environmental or biodiversity information


currently available at the required level of detail for the areas that fall within the project


footprint. will therefore be necessary to engage suitably qualified professionals to


undertake baseline studies. It will be important to commence these studies at an early stage in


the project lifecycle to allow sufficient time to collect data in both wet and dry seasons where


relevant. It will also be important to have the information available prior to the project design


being fixed because late design changes to mitigate environmental or social impacts can add


unnecessary cost and result in delays.


The Environmental and Social Impact Assessment (ESIA) Scoping Study will define the


baseline data required but it is envisaged that the following surveys/studies will be required


i) a review of the project areas with respect to protected areas, ii) vegetation and fauna


surveys, of the areas impacted by the project, iii)’background air quality survey, iv) surface


and groundwater studies, v) climate and noise surveys and vi) a marine survey at for the port.


In order to fully assess the social impact of the project on human communities likely to be


affected by the project, it will be necessary to collect baseline data in the following areas i)


social footprint of the project, ii) social and administrative structures within the region, iii)


demographic study, iv) education and health statistics, v) land use and tenure, vi) livelihood


activities & employment opportunities, vii) cultural heritage, public attitudes and perceptions


and infrastructure and public services. At the PFS stage the social professionals on the project


team will also commence the compilation of a stakeholder register. The stakeholders will


include government agencies, non-government organisations (NGO's) and key members of


the local communities. In addition a consultation strategy and a stakeholder engagement plan


will be developed and implementation of the consultation plan will also commence at this


stage. The information collected as a result of the studies outlined above will be collated,


summarised and presented as a report, or Project Brief, prepared pursuant to section 8 of the


Environment Protection Law. The Project Brief will enable a preliminary assessment of


potential environmental and social impacts to be conducted. The project Brief will also be


used in later stages of the project such as the Environmental and Social Impact Assessment


process and in the preparation of environmental and social management plans. Preliminary


Environmental and Social Design Criteria (ESDC) will be prepared for the project. The


ESDC will be based on Liberian legislative requirements. World Bank guidelines, World


Health Organisation (WHO) guidelines, best practice guidelines and other appropriate


standards and limits together with company’s environmental and social objectives. Social


criteria will include the findings of the study of people’s perceptions and values. The criteria


will cover all aspects of the project. The ESDC is a document that will be used by the design


team lo ensure the project achieves the required level of performance with respect to


environmental and social impacts. In order to achieve development approval from the


 Governmcnpa it will be necessary to conduct an environmental and social impact


assessment |ject. The Scoping Study for the ESI A will be developed during the PFS


and wj'IJ imtis of reference for the subsequent Environmental Impact Study. The


Scoping Stu^flect the potential environmental and social footprint of the project and


be based Ojfcquirementx of the Government of Liberia (i.c. section 11 of the


Environmenlon Law) and/or the World Bank/IFC as appropriate. The Scoping Study


will be issueiemment agencies and other relevant stakeholders for comment prior to


commencemJhe baseline data collection studies to ensure that it aligns with their


expectations, j








2.12 Capital Estimates


The capital c timates prepared for each project alternative for the mines, processing


plants, rail roa l allocated place at free port of Monrovia including LMC and NIOC piers


rehabilitation t • PFS level will typically have an accuracy range of ±25%, sufficient for


ranking, reject and selection of alternatives. The estimates will be prepared using a


mixture of de d costing; budget quotes, database costs, preliminary engineering, and


factored costinj >ing industry accepted experience factors. A preliminary risk analysis will


be applied to c , and schedule using probabilistic analysis techniques. This will assist in


determining thequantifcation of the project contingencies (capital and schedule) and the


associated resenes o' risk amounts that arc congruent with the risk, appetite of the project.





2.13 Operating C#st Estimates


The operating cost estimates prepared for each project alternative at the PFS level will


typically have an accuracy range of ±25%, sufficient for ranking, rejection and selection of


alternatives. The estimates for consumables, labour, spares, administration, etc. will be


prepared using a mixture of detailed costing; budget quotes, database costs, preliminary


engineering, and factored costing using industry accepted experience (actors.


2.14 Ownership, Legal and Contractual


This chapter of the PFS will address issues relating to ownership of the resource, royalties,


ownership of land and surface rights and the status of any negotiations pertaining thereto. It


will also address sovereign risk, the legal a^d regulatory systems applicable and taxation. At


the PFS stage the intended contractual strategies for sales and marketing, labour, major inputs


(electricity, water, etc.) and intellectual properly will be developed.


2.15 Financial Evaluations


A complete financial evaluation of the selected alternative only will be presented in the PFS


report. It will be structured so as to address company's investment criteria and hurdles and


may be carried out by company or by the PFS contractor. The economic analysis for a major


project such as Western Cluster is intended to capture all of the key aspects of the preliminary


work that has been completed (engineering, market study, etc.) to develop potential outcomes


that can be used to evaluate potential opportunities and risks. During the PFS, a number of


options will be evaluated at a sufficient level of detail to select a preferred alternative for the


subsequent DFS. The economic analysis at this stage of development will be budgetary, to


help i) determine the validity of the business case, ii) select the best project option, iii) set


project objectives, including target cost and schedule, iv) decide on whether to proceed to a


DFS (“go or no-go decision point”), and v) define the scope and work plan for a DFS.


Discounted cash flow (DCF) analysis is a valuation method used to estimate the


attractiveness of an investment opportunity using future free cash flow projections and


discounting them (using the weighted average cost of capital) to arrive at a present value,


which is used to evaluate the potential for investment. If the value arrived at through DCF


analysis is higher than the current cost of the investment, the opportunity may be a good one.


A DCF model will be developed for Western Cluster, including the following key inputs i)


revenues and production rate will be based on projected throughput and iron ore prices taken


from the preliminary market study, ii) capital and operating cost estimates, iii) a preliminary


estimate of working capital requirements, iv) a proposed capital structure and proposed


financing, discussed and agreed with Company’s shareholders to determine the appropriate


cost of capital (preliminary at this stage), v) an allowance for taxes based on local regulations,


vi) foreign exchange rate assumptions taken from consensus forecasts, and vii) a list of risk


items not included in the capital cost estimate will be prepared, and an allowance made for


risk management and mitigation (based on experience and benchmarking).


The financial model wiil be used to evaluate, for each option being considered, i) project


internal rate of return (IRR), ii) net present value (NPV), iii) payback period, and iv)


sensitivity of NPV to variations to major input parameters, including product price, capital


cost, major operating cost inputs (diesel, labour, etc.), foreign exchange rate, and other


relevant variables. The results wiil be used to help determine the viability of the project, areas


of potential risk and opportunity and the best project option for the subsequent DFS.


2.16 Work Plan


As part of the PFS a work plan for the further development of the project will be prepared


which will include i) activities for commencing the DFS, ii) DFS activities, iii) pre-project


commitments required, iv) a detailed DFS schedule, v) a preliminary project schedule, and vi)


a DFS cost estimate and implementation plan etc.






















































































V\|


 SCHEDULE 3


Shareholders, Affiliates and Related Matters











A. The following is (he list of the related companies with respect to Bloom Fountain


Limited





Sr. Company name Country of Relationship


No incorporation





I Sesa Goa Limited India Parent Company


2 Sesa Resources Limited India Related Company


Scsa Mining Corporation Limited India Related Company





4 Onclave PTC Limited Bahamas Related Company


5 Anil Agarwal Discretionary Trust Bahamas Related Company


6 Mr Anil Agarwal - Related Party


7 Vedanta Resources Pie Great Britain Related Company





8 Vedanta Resources Holding Limited Great Britain Related Company


9 Vedanta Resources Jersey Limited Jersey(Cf) Related Company





10 Vedanta Resources Jersey 11 Limited Jersey(Cl) Related Company


1 Vedanta Finance (Jersey) Limited Jersey(Cl) Related Company


12 Vedanta Resources Investments Great Britain


Limited Related Company


13 Vedanta Jersey Investments Limited Jersey(CI) Related Company





14 Bharat Aluminium Company Limited India Related Company


15 Copper Mines.OfTasmania Pty . Australia


Limited Related Company


16 Kujariah Gold UAL Related Company


17 Hindustan Zinc Limited India Related Company


18 The Madras Aluminium Company India


Limited Related Company


19 Monte Cello BV Netherlands Related Company





V Monte Cello Corporation NV Netherlands Related Company


21 Konkola Copper Mines PLC Zambia Related Company


11 Sterlite Energy Limned India Related Company





23 Sterlite Industries (India) Limited India Related Company


24 Goa Maritime Private Limited India Related Company


25 Stel lite Opportunities and Venture India


Limited


Related Company


26 Sterlite Infra Limited India Related Company


27 Thalanga Copper Mines Piv Limited Australia Related Company


28 Twiti Star Holding Limited Mauritius Related Company


29 Vedanta Aluminium Limited India Related Company





30 Richter Holding Limited Cyprus Related Company


51 Weslglobe Limited Mauritius Related Company


52 Great Britain


Finsidcr International Company


Limited Related Company


•* ^ Vedanta Resources Finance Limited Great Britain Related Company


54 Vedanta Resources Cyprus Limited Cyprus Related Company


35 Welter Trading Limited Cyprus Related Company !





 36 L.ikon:,.. 1:;) 13 V Netherlands Related Company


37 TUI. Zinc Ventures Limited - Former Mauritius


TML KCM Limited Related Company


38 Twinstar Energy Holdings Limited - Mauritius


Former TILL Aluminium


Related Company


36 THl. 7inc Limited - Fortner KCM Mauritius


Holdings Limited Related Company


<10 Sterlite (USA) Inc. USA Related Company


41 Talwandi Sabo Power Limited India Related Company





42 Allied Port Services Pvt Ltd India Related Company


43 Konkola Resources Pic Great Britain Related Company


44 Vizag General Cargo Berth Pvt. India


Limited Related Company


45 Twin Star Mauritius ! lolding Limited Mauritius Related Company


46 Vedanta Namibia Holdings Limited Namibia Related Company


47 Skorpion Zinc (Pty)'Limited Namibia Related Companv





48 Namzinc (Pty) Limited Namibia Related Company


49 Skorpion Mining Company (Pty) Namibia


Limited Related Company


50 Arnica Guesthouse (Pty) Ltd Namibia Related Company


51 Rosh Pinah healthcare (Pty) Ltd Namibia Related Company





52 Black Mountain Mining (Pty) Ltd South Africa Related Company


53 THL Zinc Holding BV - Former Netherlands


Labaumc BV Related Company


54 .. Lisheen Mine Partnership Ireland Related Company


55 THl, Zinc Holding Cooperative LLA Netherlands Related Company


56 Pecvest 17 Pvt. Lid. South Africa Related Company





57 Vedanta Lishccn Finance Limited heland Related Companv


58 Vedanta Base Metals (Ireland) Ireland


Limited Related Companv


59 Vedanta Lisheen Mining Limited Ireland Related Companv


60 Killoran Lishccn Mining Limited Ireland Related Companv


Killoran Lisheen Finance Limited Ireland Related Companv


61


62 Lisheen Milling Limited Ireland Related Company


63 Killoran Concentrates Limited Ireland Related Companv


64 Killoran Lisheen Limited Ireland Related Company


65 Killoran Lisheen Holdings Limited Ireland Related Companv





66 Azela Limited Ireland Related Company


67 Paradip Pori Services Pvt l.united India Related Company


68 MALCO Power Company Limited India Related Company


69 Malco Industries Limited India Related Companv








B. The following is the list of the related companies with respect to Elcnilto


Minerals & Mining LLC:





place of





Company name incorporated Relationship








I Blenillo Minerals & Mining LLC Delaware parent company


T Elenilto Resources Ltd Anguilla related company


**


3 Eleniito Investments Ltd Anguilla related company


4 Engelinvest Ltd Cyprus related company


5 Elenilto Investments Ltd Cyprus related company


6 White sands Ltd Israel related company


7 Elenilto Israel Ltd Israel related company


8 Elenilto TZ Ltd Tanzania related company


9 M&N Ltd Israel related company


10 Venosa Ltd Cyprus related company


11 Engelinvestment Rus Ltd Cyprus related company


12 Banderiac Ltd Cyprus related company


13 Rimon estate Ltd India related company


14 Engelinvest 38 Ltd Israel related company


15 Global Comprehensive Development GCD ltd Cyprus related company








C. The senior officer and the director of the Company is Mr. Amir Nagammy.


D. The Senior Officer and/or Directors of Bloom Fountain Limited








Minimax Limited Director


Mr Gyaneshwarnath Gowrca Representative of Minimax Limited


Mr Craig Thomas Downes Representative of Miiiimpx Limited





The Senior Officer and/or Directors of Vedanta Resources Pic








Mr Anil Agarwal Executive Chairman


Mr Navin Agarwal Deputy Executive Chairman


Mr MS Mehta Chief Executive Officer


Mr Naresh Chandra Non Executive Director


Mr Aman Mehta Non Executive Director


Mr Euan Macdonald Non Executive Director














The Senior Officer and/or Directors of Sesa Goa


Mr. Prasun K. Mukherjee Managing Director


Mr. Sushil Gupta Chief Financial Officer


Mr. Suresh Ch Singh Vice President


Mr. Amit Pradhan Whole Time Director


Mr. Pandurang G. Kakodkar Non Executive Director


Mr. Kutdip K. Kaura Non Executive Director


Mr. Gunidas D. Kama. Non Executive Director


Mr. Ashok Kini Non Executive Director


Mr. Jagdish P. Singh Non Executive Director








E. Indirectly (through Elcnilto Minerals & Mining LLC) Mr. Jacob Engel owns 40.4%.


F. Individual Shareholders with Shareholding above 10%





Sesa Goa Limited (as at June 2011)








Finsider International Company Ltd 46.20


Westglobe Ltd 5.10


Twinstar Holdings Ltd 3.83


Total Vedanta Group 55.13


Outside shareholders with >10% Shareholding NIL





Vedanta Resources Pic (As ai June 2011)





Volcan Investments Ltd 62%


Outside shareholders with >10% Shareholding NIL


























































































































4:!


 EXHIBIT 1A





FORM OF CLASS A MINING LICENSE





This CLASS A MINING LICENSE (this “Mining License"! is dated [ J, 2[...J and made


by and between the MINISTER OF LANDS, MINES & ENERGY OF THE REPUBLIC


OF LIBERIA (hereinafter referred to as the “MINISTER”), and WESTERN CLUSTER


LIMITED, a corporation organized under the laws of Liberia (hereinafter referred to as the


“CONCESSIONAIRE”).


Capitalized terms used but not defined herein shall have the meaning ascribed to them in the





Mineral Development Agreement, dated _____, 2011 among the Government of the


Republic of Liberia, Western Cluster Limited and Elenilto Minerals & Mining Limited (the


“MPA”) or, if not defined therein, in the Minerals and Mining Law 2000 Part I, Title 23 of


the Liberian Code of Laws Revised (the “Minerals and Mining Law”), any regulations issued


under the Minerals and Mining Law (except to the extent provided in the MDA) or the


Exploration Regulations.


WITNESSETH:


WHEREAS, the Government and the CONCESSIONAIRE have concluded, and the





CONCESSIONAIRE is materially in compliance with, the provisions of the MDA relating to


the application for a Mining License;


WHEREAS, the CONCESSIONAIRE is an Eligible Applicant for a Mining License;


WHEREAS, the MINISTER has the power to grant the CONCESSIONAIRE a Mining


License as contemplated in the MDA, and to permit the CONCESSIONAIRE to conduct the


Operations as contemplated by the MDA;


NOW, THEREFORE, for and in consideration of the premises, the mutual promises made





by and between the Government and the CONCESSIONAIRE (hereinafter referred to as “the


Parties”), and the terms and conditions herein contained and in the MDA, it is hereby


irrevocably provided as follows:


Grant of Mining License





1. The MINISTER hereby grants to the CONCESSIONAIRE a Mining License for the


Proposed Production Area, together with all related rights and privileges to allow the


CONCESSIONAIRE to conduct the Operations contemplated by the MDA. This


grant is subject to the provisions of the MDA. To the extent that there is any conflict


between the terms of this Mining License or any Regulations and the terms of the


MDA, the MDA shall prevail.





Term of License


2. The initial term of the Mining License shall commence on the date first above written


and shall be for twenty-five (25) years unless earlier terminated pursuant to any


Section of the VIDA. The CONCESSIONAIRE shall have the right to renew the


Mining License, for consecutive additional terms not to exceed twenty-five (25) years


each subject to the provisions of the MDA.





A


Discovery of Other Minerals





3. Subject to any prior rights of third parties arising as a result of exploration activities


of such third parties permitted under Section 4.5 of the MDA, if the Company


discovers other Minerals within a Production Area the Company may apply for an


amendment to this Mining License or for a new Mining License to cover the new


Minerals in accordance with this Mining License and the Agreement and the


Government shall not unreasonably withhold its approval of such amendment or grant


of a new Mining License provided that the Company has submitted to the


Government an amendment to the existing Feasibility Report or, at the Government’s


discretion, a new Feasibility Report, for such other Minerals.


Additional Exploration within the Proposed Production Area


4. If the CONCESSIONAIRE wishes to carry out additional Exploration within the


Proposed Production Area it may do so in accordance with the MDA.


Surface Rights


5. Without prejudice to the generality of the rights provided in the MDA, the grant of the


Mining License shall, pursuant to the provisions of Section 6.7(d) of the Minerals and


Mining Law, carry the following surface rights:


(i) Erection of habitations, office buildings, mill buildings, engine houses, storehouses;


(ii) Building of dumps, ditches for drainage', roads within the surface boundaries of the


Proposed Production Area;


(iii) Making trenches and open cuts, constructed for and necessary Mining Operation;


(iv) Cutting of timber only insofar as it is necessary to clear for buildings and such works


as are mentioned in (i) to (iii) above and to use in construction of the mining site; and


(v) Use of water and other resources necessary for the execution of the work.


Rights to Dispose of Minerals


6. The CONCESSIONAIRE shall have the right to freely dispose of within Liberia all


Minerals extracted under the terms of this Mining License, and may export all such


Minerals in their original or changed form subject to the specific provisions of the


MDA.


Reports by the CONCESSIONAIRE


7. The CONCESSIONAIRE shall submit to the MINIS TER reports in accordance with


the MDA.


Inspection of Mining Premises and Books


8. The MINISTER shall have the right in accordance with the terms of the MDA to


order an inspection at any time of the Proposed Production Area and of the books and


records ofthe CONCESSIONAIRE.


 SECTION 704. ROYALTIES AND SURFACE RENT


(a) Royalties. A royalty is due and payable to the Government of Liberia at the time of each shipment and in the


amount of the stated percent of the value of commercially shipped mineral, regardless of whether the shipment


is a sale or other disposition:


(1) Iron ore. 4.5 percent.


(2) Gold and other base metals- 3 percent.


(3) Commercial diamonds. 5 percent.


(b) Surface Rent. A producer who has a mineral exploration license or a Class A mining license shall pay an annual


surface rent.


(1) The surface rent is:


(A) Land within a mineral exploration license area. US S0.20 (Twenty Untied States Cents) per acre.


(B) Land within a mining license area.


(i) Year 1-10 US S5.00 peracre.


(ii) Year 11-25 US $10.00 per acre.


(2) Annual payments are due on or before the effective date of the agreement and on the agreement anniversary


date thereafter-


(3) Surface cent amounts stated in this section shall be subject to inflationary adjustment in accordance with the


GDP Implicit Price Deflator as published and revised from time to time to time by the U.S. Department of


Commerce, Bureau of Economic Analysis ("the deflator"). The inflation-adjusted rent shall be effective


January I of each calendar year based on the ratio of the value of the revised deflator for the second quarter


of the immediately preceding calendar year to the value of the revised deflator for the second quarter of


2008.


SECTION 705. DETERMINATION 01< TAXABLE INCOME OFMININC PROJECTS


(a) Gross Income. The gross income of a mining project includes---


(1) All revenues resulting from production and other operations carried out under the project's mining license;


(2) Any other income that the project receives from business activity or investment accruing in, derived from,


brought into or received in Liberia, including currency gains when realized (but not gains from hedging


transactions), less the deductions set forth in subsection (b).


(b) Deductions Allowed from Gross Income. In accordance with the rules of Chapter 2, ali expenditures incurred


during the tax period wholly, exclusively, and necessarily in connection with project operations (including non¬


capital operating costs but excluding capital costs except to the extent of the annual allowance for depreciation),


are allowed as deductions, including but not limited to the following items:


(1) Royalties and surface rent (as specified in Section 704), and fees and rent paid for the privilege of a mining


exploration iicense or a Class A mining license in accordance with the Mining Law.


(2) An allowance for depreciation of mining plant and equipment in accordance with the depreciation rules oT


Chapter 2, subject to the special rule of Section 706.


(3) A carryforward of net operating loss from a prior year to the extent permiited under Section 203(e) as


modified by Section 707.


I-


(c) Form of Organization Disregarded. Regardless of the legal form of organization adopted by one or more


persons having an interest in a mining project, a producer's taxable income shall be determined separately for


each mining production project, and a person with an interest in more than one mining production project shall


not be permitted to consolidate income or loss of one mining production project with that of any other.


(1) For purposes of determining income tax, income from a mining project is considered to be income of a


resident legal person or of a Section 803 permanent establishment taxable according to the rules applicable


to a resident legal person. Taxable income and income tax liability are determined under provisions of the


regular income tax of Chapter 2 subject to special rules provided in this Chapter.


(2) In accordance with Section 10(z), a producer who holds a Class A mining license ("license") granted under


the Mining Law is considered to have an interest in the mining project that is the subject of the license and


is the taxpayer legally responsible for paying tax with respect to income of the project.


(3) The Chapter 9 filing and advance payment rules for the regular income tax apply to a producer with income


from a mining project.


(^) Mining Law. The Mining Law governs non-tax terms of extraction of minerals in Liberia, including licenses


and fees.


(e) Valuation of Minerals. Extracted minerals shall be valued for all purposes of this Code using the valuation


method described in Section 703.


(0 US Dollar Accounting. Books and records of a mining project may be kept in 1,Iberian or US Dollars, but a


mining project's tax and taxable income shall be determined in US Dollars.


(g) Consolidated Account. An amount that a producer is required to contribute to a development fund or other fund


specified in this Chapter, or a payment a producer is required to make under the Mining Law, is to be paid into


the consolidated account.


(h) Compliance. An amount clue or amount in default under an agreement between a mining project producer and


the Government of Liberia is treated as a tax liability under this Code, and is subject to the same procedural


requirements (including penalties, fees, and interest).


SECTION 702. RATE OF TAX


(a) Rate. The rate of tax on taxable income from a mining project shall be 30 percent.


(b) Surtax on Income from High-Yield Projects. Income from a high-yield mining project, as defined in Section


730, shall be subject to a higher marginal rate of income tax on taxable income under the conditions and using


the calculation method set out in that section.


SECTION 703. VALUATION





(a) Genera! Rule. Minerals extracted by a mining project are valued for all purposes at fair market value f.o.b.


Liberia without reduction for claims, counterclaims, discounts, commissions, or any other asserted offset or


deduction.


(b) Cross-Reference. The fair market value f.o.b. Liberia is determined for the day of shipment in accordance with


Section I0(cc), and in the case of a product for which there is a reliable international price index, as specified in


regulations referencing that index.


(c) Gold. The fair market value of gold f.o.b. Liberia is the London afternoon gold price fixing ("London PM fix")


for the day the gold is shipped from Liberia.


(d) Advance Pricing Agreement. The Government of Liberia and a producer may agree to a transfer pricing


methodology in an advance pricing agreement in accordance with Section 18.




















.1





 (4) Mining Project The term "mining project" means mineral exploration, mineral development, or mining


carried out by a mining project producer within a mineral exploration license area or a mining license area.


(5) Mining Production Project. The term “mining production project” means mineral development, mining, or


related activities carried out by a mining project producer within a mining license area.


(5) Other Mining Activity. Mineral exploration, mining development, mining, or related activities earned out


under any category of license issued in accordance with the Mining Law other than a mining exploration


license or a Class A mining license is not a "mining project" and is taxable under the general rules of


Chapter 2 rather than as a "mining project" under this Chapter, except that the royalty rates of Section 704


apply to the sale or other disposition of minerals mined under a license other than a Class A license.








(d) Capital Goods. For purposes of this Chapter, the term "capital goods" has the same meaning as in Section


1001(g)(5).


(e) Commercial Production.


(1) A mining or petroleum project begins "commercial production” on the dale of the fust shipment of mineral


or petroleum extracted from a mining license area or petroleum area as paptof a regular program of profit-


seeking activity.


(2) Commercial production ends on the last day of a tax period in which the number of shipments is less than


one-tenth of the average shipments during the first three years of commercial production.


(f) Exploration Expenditures.


(1) Mining. “Mineral exploration expenditures” are costs associated with exploration of a mineral exploration





license area to determine whether it is possible to develop the area for production of minerals.


(g) Development Expenditures.


(1) Mining. “Mining development expenditures” are costs associated with the development of a mining license


area, or a part thereof, to prepare it for commercial production.


(h) Attribution of Expenditures. Exploration, development, and capital goods expenditures incurred prior to a


project's first tax period are attributable to it for income tax purposes as follows---


(i) Mining Project. In Che case of a mining project, expenditures incurred prior to the existence of any mining


production project within a mineral exploration license yea are attributable io the first mining production


project established within the first mining license area within a mineral exploration license area.


Subsequent expenditures in the mineral exploration license area after the date of the first Class A mining


license, but outside the first mining license area, are attributed to subsequent mining production projects


under subsequent Class A mining licenses issued for the mineral exploration license area. Exploration,


development, and capital goods expenditures not attributable to a mining production project described in


this paragraph are not deductible in determining taxable income.








SUBCHAPTER A. MINING


SECTION 701. SCOPE OF SUBCHAPTER





(a) Income Taxation. In accordance with the provisions of Part II (ty the extent applicable) and as specifically


provided in this Chapter, income tax is imposed on taxable income from a mining project (as defined in Section


700). In case of inconsistency with other provisions of Part II, the provisions of this subchapter are


determinative.


(b) Rate of Tax. Taxable income from a mining project is subject to income tax at the rate stated in Section 702.














O.


I





Y*


 must disclose the error or omission in its next-filed tax return or other scheduled report (or sootier as


specified in regulations).


(b) Guidelines. The term "Guidelines" means the guidelines established by the Organization for Economic


Cooperation and Development and by the United Nations with respect to transfer pricing.


(c) Obligations of the Parties In negotiation of a TPM, the Ministry of Finance and the producer are required to


take the Guidelines into account.





*»*


CHAPTER 7. INCOME TAXATION OF NATURAL RESOURCES





Section 700. Definitions


Subchapter A. Mining


Section 701, Scope of Subchapter


Section 702. Rate of Tax


Section 703. Valuation


Section 704. Royalties and Surface Rent


Section 705. Determination of Taxable Income of Mining Projects


Section 706. Special Rule for Depreciation


Section 707. Special Rule for Net Operating Loss Carryforward


Section 708. Special Rule for Interest Deduction


Section 709. Special Rule for Mining Exploration and Development Expenditures


Section 710. Special Rule for Decommissioning Expenses


Section 711. Treatment of Property Transfers


Section 712. Successor Agreement; Transfer of Interest in Project


Section 713. Transactions between Related Persons


Section 714. Partnerships and Joint Ventures


Sections 715-729. Reserved


Section 730. Surtax on Income from High-Yield Projects


Section 731. Determination of Expenditures for Section 730 Purposes


Section 732. Determination of Total Revenues for Section 730 Purposes


Sections 733-739. Reserved











SECTION 700. DEFINITIONS


(a) Producer. The term “producer” means a “mining project producer” or a “petroleum project producer” as


specified in subsections (b) and (c).


(b) Mining Project


(1) Producer. A "mining project producer" (or the short form “producer,” used for convenience when the


context is clear) is a person who---


(A) Carries out mineral exploration under a mineral exploration license issued under the Mining Law; or





(B) Carries out mineral exploration, development, or production activity under a mineral development


agreement or a Class A mining license issued in accordance with the Mining Law.


(2) Mineral Exploration License Area. A "mineral exploration license area" is the geographic area covered by


a mineral exploration license.


(3) Mining License Area. A "mining license area" is the geographic area covered by a Class A mining license.

















J


V


 EXHIBIT 3





OTHER APPROVED FISCAL PROVISIONS








This Exhibit shall be read in conjunction with the Revenue Code. To the extent of


any conflict with the Revenue Code, this Exhibit shall govern to the extent that this Agreement


so provides.





* * *


SECTION 17. STABILITY OF FISCAL REGIME FOR MINING, PETROLEUM, AND RENEWABLE


RESOURCE PROJECTS


When entering into an agreement with a Chapter 6 contractor, or a Chapter 7 producer, the


Government of Liberia is permitted to accept a clause stabilizing the following aspects of taxation to the terms under


Code provisions for a period not to exceed 15 years from the effective date of the agreement:


(1) The income tax rate;


(2) The rate of royalty;


(3) The special rule for extended net operating loss carryforward;


(4) The special rule for depreciation and other cost recovery;


(5) The rate for withholding of tax on pay ments;


(6) The exemption provided in Section 1001(c)(6) and 1001(g)(5);


(7) The exemption provided in Section 1708(b); and


(8) The exemption provided in Section 2009(i).








***





Section 18. Advance Pricing Agreement


(a) General Rule. The term "advance pricing agreement" (“APA”) means an agreement with the Government of


Liberia establishing a transfer pricing methodology (“TPM”) intended to reflect transactions between related


parties as they would be ifthey had been between unrelated parlies dealing at arm’s length. If a person who has


entered into an APA complies hilly with its terms and conditions, the Ministry of Finance will not contest the


application of the TPM to the .subject matter of the APA.


(1) In addition to the TPM, an A PA may specify the related parry transactions or transfers the agreement covers


(“covered transactions”), the APA term, operalional and compliance provisions, appropriate adjustments,


critical assumptions regarding future events, mandatory recordkeeping, annual reporting responsibilities,


and other provisions that may be appropriate, necessary, or desirable.


(2) An APA is a supplement to administrative and judicial mechanisms for resolving transfer pricing issues.


(3) A person who has entered into an APA must maintain books and records sufficient to enable the Ministry of


Finance to examine whether the producer has complied with the APA.


(4) Both while an APA request is pending and after an APA is executed, a person who lias entered into an APA


is under a continuing duty to supplement material facts and information submitted in connection with the


person’s request for the APA. If, after an APA is executed, the person discovers that information provided


in connection with the APA request was false, incorrect, or incomplete in some material respect, the person

















r\ \ J


IN WITNESS WHEREOF, the undersigned have executed end delivered this


Guarantee as of the date first above written.





ELENILTO MINERALS & MINING LLC











By:


Name:


Title:





SF.SA GOA LTD











By:


Name:


Title:








ACCEPTED AND AGREED: THE GOVERNMENT OF THE





REPUBLIC OF LIBERIA

















By: MINISTER OF LANDS, MINES


AND ENERGY








By: MINISTER OF FINANCE’











By: THE CHAIRMAN OF THE


NATIONAL INVESTMEN T


COMMISSION




















ATTESTED BY:











MINISTER OF JUSTICE


REPUBLIC OF LIBERIA











i











•i








has been brought in an inconvenient forum. Process in any such suit, action or proceeding


may be served on either Party anywhere in the world, whether within or without the


jurisdiction of any such court.


33 If any term or other provision of this Guarantee is invalid, illegal or incapable of being


enforced by any rule of law, or public policy, all other conditions and provisions of this


Guarantee shall nevertheless remain in full force and effect so long as the economic or


legal substance of the transactions contemplated hereby is not affected in any manner


materially adverse to any party; provided, however, that this Guarantee may not be


enforced without giving effect to the provisions of Section 1 hereof. No party hereto shall


assert, and each party shall cause its respective affiliates not to assert, that this Guarantee


or any part hereof is invalid, illegal or unenforceable. Upon such determination that any


term or other provision is invalid, illegal or incapable of being enforced, the parties hereto


shall negotiate in good faith to modify this Guarantee so as to effect the original intent of


the parties as closely as possible in a mutually acceptable manner in order that the


transactions contemplated hereby be consummated as originally contemplated to the fullest


extent possible.


34 This Guarantee may be executed and delivered (including by facsimile transmission) in


two (2) or more counterparts, and by the different parties hereto in separate counterparts,


each of which when executed and delivered shall be deemed to be an original but all of


which taken together shall constitute one and the same agreement.


35 Capitalized terms used but not defined herein shall have the meaning assigned to them in


the MDA.





[Remainder of this page intentionally left blank: signature page follows.)


 With a copy to





The Minister of Justice


Ministry of Justice


Ashmun & Center Street


Monrovia, Liberia





If to Guarantor:


ELEN1LTO MINERALS & MINING LLC


Address: 160 Greentree Drive, Suite 101,


Dover, Kent Country,


Delaware 19904


Fax number: +972 3608 8455


Attention: Mr. Gal Chet


Email: gal@csglaw.co.iLalon@cngelin ve.st.com.


iacob@cngelinvest.com








SESA GOA LTD


Address: Sesa Ghor,


Patto, Panjim,


Goa 403 001


Fax number: +91 832 246 0816


Attention: Mr. P.K.. Mukheqee


Email: pkm@vedanta.co.in





Beneficiary and Guarantor may designate by notice in writing a new address to which any


notice, demand, request or other communication may thereafter be so given, served or sent


Each notice, demand, request, or other communication which shall be delivered in the


manner described above, shall be deemed sufficiently given, served, sent, received or


delivered for all purposes at such time as it is delivered to the addressee.


31 'This Guarantee shad 6e governed by and construed in accordance with the laws of the


State of New York, without giving effect to the conflicts of laws principles thereof (other


than Section 5-1401 of the New York General Obligations Law).


32 The parties agree that any suit, action or proceeding seeking to enforce any provision of, or





based on any matter arising ottt of or in connection with this Guarantee, or the transactions


contemplated hereby, shall be brought in any federal court sitting in New York State, so


long as one of such courts shall have subject matter jurisdiction over such suit, action or


proceeding, and that any cause of action arising out of this Guarantee shall be deemed to


have arisen from a transaction of business in the State of New York. Each of the parties


hereby irrevocably consents to the exclusive jurisdiction of such courts (and of the


appropriate appellate courts therefrom) in any such suit, action or proceeding and


irrevocably waives, to the fullest extent permitted by law, any objection that it may now or


hereafter have to the laying of the venue of any such suit, action or proceeding in any


court or my objection (hat any such suit, action or proceeding brought in any such court














.1


P


Guarantee; and (iiij ibis Guarantee constitutes a legal, valid and binding obligation of


Guarantor, enforceable against Guarantor in accordance with its terms.


28 Within 120 days following the end of each financial year of Sesa Goa Ltd., Sesa Goa Ltd.





shall deliver to Beneficiary the financial statements and opinion regarding Sesa Goa (as


opposed to the Company) described in Sections 17.4 (a) and (b), respectively, of the MDA.





29 This Guarantee shall remain in full force and effect and shall be binding on Guarantor,


jointly and severally, and their respective successors and permitted assigns until the


satisfaction in full of the Guaranteed Obligations.


30 All notices, demands, requests and other communications to Beneficiary or Guarantor


hereunder must be in writing and shall be deemed to have been given: (i) on the date of


personal delivery; or (ii) if sent by facsimile to the numbers shown below and followed


with a telephonic confirmation or copy sent by first class mail, on the date of such


facsimile transmission, or (jii) when properly deposited for delivery by commercial


overnight delivery service, prepaid, on the date delivered, as set forth in the records of such


delivery service; and shall be addressed as follows:


if to Beneficiary :





The Minister of Lands, Mines and Energy


Ministry of Lands, Mines and Energy


Capitol Hill


Monrovia,


Liberia





And





The Minister of Finance


Ministry of Finance


Broad Street


P.O. Box 10-9013


Monrovia, Liberia


And





The Chairman, National Investment Commission


National Investment Commission


12th Street Sinkor


P.O. Box 10-9043


Monrovia, Liberia























f'





)


conditions thereof; it being the intention hereof that Guarantor shall remain liable as a


principal until all Guaranteed Obligations shall have been fully satisfied, or this Guarantee


is otherwise terminated under Section 12 hereof, notwithstanding any act, omission, or


thing which might otherwise operate as a legal or equitable discharge of Guarantor.


21 Guarantor’s obligations as guarantor shall not be impaired, modified, changed, released, or


limited in any manner whatsoever by any impairment, modification, change, release, or


limitation of the liability of the Company or its estates in bankruptcy, resulting from the


operation of any present or future provision of the bankruptcy laws or other similar statute,


or from the decision of any court.


22 Beneficiary shall have the full right, in its discretion and without any notice to or consent


from Guarantor, from time to time and at any time and without affecting, impairing, or


discharging, in whole or in part, the liability of Guarantor hereunder: (a) to extend, in


whole or in part, by renewal or otherwise, and on one or any number of occasions, the time


for the performance of any term or condition of the MDA; (b) to settle, compromise,


release, substitute, surrender, modify, or impairHo enforce and exercise, or to fail or refuse


to enforce or exercise, any claims, rights, or remedies, of any kind or nature, which


Beneficiary may at any time have against the Company.


23 This Guarantee is an absolute, unconditional and continuing guarantee of performance and


not of collection. Guarantor hereby agrees that its obligations hereunder are irrevocable,


and are independent of the obligations of the Company; that a separate action or actions


may be brought and prosecuted against Guarantor regardless of whether any action is


brought against the Company or whether the Company is joined in 'any such action or


actions; and Guarantor hereby waives the benefit of any statute of limitations affecting its


liability hereunder or the enforcement hereof.


24 In the event that Beneficiary retains or engages an attorney or attorneys to successfully


enforce this Guarantee Guarantor shall reimburse Beneficiary for all expenses incurred,


including attorneys' fees and disbursements in connection with such enforcement


25 Guarantor shall have no right of subrogation whatsoever with respect to the Guaranteed


Obligations or to any collateral securing such obligations unless and until such obligations


have been paid in full.


26 Guarantor may not assign its obligations under this Guarantee to any Person without the


prior written consent of Beneficiary. Guarantor agrees that this Guarantee shall be binding


upon and enforceable against Guarantor and Guarantor’s successors or permitted assigns.


27 Guarantor hereby represents and warrants that: (i) the execution, delivery and performance


by Guarantor of this Guarantee and the fulfillment of and compliance with the terms and


provisions hereof have been duly authorized by Guarantor (with such authorization in full


force and effect), and do not and will not conflict with or violate any provision of its


formation or organizational documents or conflict with, or result in any breach of, or


constitute a default under, any agreement to which Guarantor is a party or by which


Guarantor is bound; (ii) no other action is necessary for Guarantor to enter into this


 EXHIBIT 2C


FORM OF MINING GUARANTEE





THIS GUARANTEE (this “Guarantee"! is made as of ____[_J, 2011 by ELENILTO


MINERALS & MINING LLC and SESA GOA LTD (“Guarantor”), to and for the benefit of the


Republic of Liberia (“Beneficiary”).


WITNESSETH:


A. By a Mineral Development Agreement, dated as of August 3, 2011, made by and among


Beneficiary, Western Cluster Limited (the “Company”) and Elenilto Minerals & Mining


LLC and SESA GOA LTD (as such agreement may be amended from time to time, the


“MPA"), die Company has agreed to execute and complete certain obligations upon the


terms, and subject to the conditions set forth in, the MDA.


B. The Company is directly or indirectly controlled by Guarantor or an Affiliate of die


* Guarantor and Guarantor or one of its Affiliates will be considerably benefited by the


MDA.


C. At the request of Beneficiary, Guarantor has agreed to guarantee due performance of the


obligations of the Company as specified herein on the terms and subject to the conditions


set out herein.


NOW, THEREFORE, in consideration of the foregoing, and other good and valuable


consideration the receipt -of. which is hereby acknowledged and accepted, Guarantor hereby


agrees as follows:


18 Guarantor hereby irrevocably, unconditionally and absolutely guarantees any obligation or


liability of the Company under, or undertaken in connection with Sections 6.2 and 20.5(a)


of the MDA, provided, that in no event shall Guarantor be obligated to expend more than


US$50 million (the “Guaranteed Obligations”), regardless of whether recovery on such


Guaranteed Obligations may be or hereafter become barred by any statute of limitations or


such Guaranteed Obligations may otherwise be or become unenforceable.


19 Guarantor agrees that this Guarantee shall be deemed a continuing guarantee of those


Guaranteed Obligations. Guarantor hereby expressly acknowledges and agrees that,


notwithstanding anything to the contrary set forth in the MDA, for purposes of this


Guarantee, “Guaranteed Obligations” shall be deemed to include all (he obligations and


liabilities of any Affiliate of the Company to which rights and obligations under the MDA


have been assigned.


20 Guarantor hereby irrevocably waives (i) diligence, presentment, protest, notice of dishonor,


demand, extension of time for payment, notice of non-payment, and indulgences and


notices of every kind, (ii) any lack of validity or enforceability of this Guarantee, the MDA


or any agreement or instrument relating thereto, and (iii) any other circumstance that might


otherwise constitute a defense available to, or a discharge of Guarantor under, applicable


law, Guarantor hereby consents to any and all forbearances and extensions of time of


payment in connection with the MDA, and to any and ail changes in terms, covenants, and


IN WITNESS WHEREOF, the undersigned have executed and delivered this


Guarantee as of the date first above written.


ELENILTO MINERALS & MINING LLC








By:





Name:


Title:





SESA GOA LTD








By:


Name:


Title:








ACCEPTED AND AGREED: THE GOVERNMENT OF THE


REPUBLIC OF LIBERIA

















By: MINISTER OF LANDS, MINES


AND ENERGY








By: MINISTER OF FINANCE





_/


By: THE CHAIRMAN OF THE


NATIONAL INVESTMENT


COMMISSION

















ATTESTED BY:








MINISTER OF JUSTICE


REPUBLIC OF LIBERIA

















jr





\


contemplated hereby, shall be brought in any federal court sitting in New York State, so


long as one of such courts shall have subject matter jurisdiction over such suit, action or


proceeding, and that any cause of action arising out of this Guarantee shall be deemed to


have arisen from a transaction of business in the State of New York. Each of the parties


hereby irrevocably consents to the exclusive jurisdiction of such courts (and of the


appropriate appellate courts therefrom) in any such suit, action or proceeding and


irrevocably waives, to the fullest extent permitted by law, any objection that it may now or


hereafter have to the laying of the venue of any such suit, action or proceeding in any such


court or any objection that any such suit, action or proceeding brought in any such court


has been brought in an incottvenient forum. Process in any such suit, action or proceeding


may be served on either Party anywhere in the world, whether within or without the


jurisdiction of any such court.


16 If any term or other provision of this Guarantee is invalid, illegal or incapable of being


enforced by any rule of law, or public policy, all other conditions and provisions of this


Guarantee shall nevertheless remain in full force and effect so long as the economic or


legal substance of the transactions contemplated hereby is not affected in any manner


materially adverse to any party; provided, however, that this Guarantee may not be


enforced without giving effect to the provisions of Section 1 hereof. No party hereto shall


assert, and each party shall cause its respective affiliates not to assert, that this Guarantee


or any part hereof is invalid, illegal or unenforceable, Upon such determination that any


term or other provision is invalid, illegal or incapable of being enforced, the parties hereto


shall negotiate in good faith to modify this Guarantee so as to effect the original intent of


the parties as closely as possible in a mutually acceptable manner in order that the


transactions contemplated hereby be.consummated as originally contemplated to the fullest


extent possible.


17 This Guarantee may be executed and delivered (including by facsimile transmission) in


two (2) or more counterparts, and by the different parties hereto in separate counterparts,


each of which when executed and delivered shall be deemed to be an original but all of


which taken together shall constitute one and the same agreement.


18 Capitalized terms used but not defined herein shall have the meaning assigned to them in





the MDA.





[Remainder of this page intentionally left blank: signature page follows. ]



































•ft














\ \ .1


 And





The Chairman, National investment Commission


National Investment Commission


I2,h Street Sinkor


P.O.Box 10-9043


Monrovia, Liberia





With a copy to





The Minister of Justice


Ministry of Justice


Ashmun & Center Street


Monrovia, Liberia





If to Guarantor:


BLENILTO MINERALS & MINING LLC


Address: 160 Greentree Drive, Suite 101,


Dover, Kent Country,


Delaware 19904


Fax number: + 972 3608 8455


Attention: Mr. Gal Chet


Email: gal@csLdaw-.co.il,alon@ermclinvest.com,


jacob@ermciinvest.coin





SESAGOA LTD


Address: Sesa Ghor,


Patto, Panjim,


Goa 403 001


Fax number: +91 8322460816


Attention: Mr. P.K. Mukherjee


Email: pkm@vedanta.co. in





Beneficiary and Guarantor may designate by notice in writing a new address to which any


notice, demand, request or other communication may thereafter be so given, served or sent.


Each notice, demand, request, or other communication which shall be delivered in the


manner described above, shall be deemed sufficiently given, served, sent, received or


delivered for all purposes at such time as it is delivered to the addressee.





14 1'his Guarantee shall be governed by and construed in accordance with the laws of the


State of New York, without giving effect to the conflicts of laws principles thereof (other


than Section 5-1401 of the New York General Obligations Law).


15 The parties agree that any suit, action or proceeding seeking to enforce any provision of, or


based on any matter arising out of or in connection with this Guarantee, or the transactions


*











.1


formation or organizational documents or conflict with, or result in any breach of, or


constitute a default under, any agreement to which Guarantor is a party or by which


Guarantor is bound; (ii) no other action is necessary for Guarantor to enter into this


Guarantee; (iii) this Guarantee constitutes a legal, valid and binding obligation of


Guarantor, enforceable against Guarantor in accordance with its terms; and (iv) Exhibit A


attached hereto sets forth a true, correct and complete copy of the most recent balance


sheet of the Guarantor which balance sheet, has been prepared in accordance with GAAP


or IFRS and presents fairly in all material respects the financial position of Guarantor as of


the dates indicated therein.


11 Within 120 days following the end of each financial year of Sesa Goa Ltd., Sesa Goa Ltd.





shall deliver to Beneficiary the financial statements and opinion regarding Sesa Goa (as


opposed to the Company) described in Sections 17.4 (a) and(b), respectively, of theMDA.


12 This Guarantee shall remain in full force and effect and shall be binding on Guarantor,


jointly and severally, and their respective successors and permitted assigns until the earliest


of: (i) satisfaction in full of the Guaranteed Obligations; (ii) the payment by the Guarantor


under this Guarantee of the maximum amount described in Section 1 hereof; and (iii) the


date which is one year after the termination of all the Exploration Licenses.


13 All notices, demands, requests and other communications to Beneficiary or Guarantor


hereunder must be in writing and shall be deemed to have been given: (i) on the date of


personal delivery; or (ii) if sent by facsimile to the numbers shown below and followed


with a telephonic confirmation or copy sent by first class mail, on the date of such


facsimile transmission; or (iii) when properly deposited for delivery by commercial


overnight delivery service, prepaid, on the date delivered, as set forth in the records of such


delivery service; and shall be addressed as follows:





if to Beneficiary:





The Minister of Lands, Mines and Energy


Ministry of Lands, Mines and Energy


Capitol Hill


Monrovia, Liberia


And





The Minister of Finance


Ministry of Finance


Broad Street


P.O. Box 10-9013


Monrovia, Liberia


























V*


otherwise constitute a defense available to, or a discharge of Guarantor under, applicable


law. Guarantor hereby consents to any and all forbearances and extensions of time of


payment in connection with the MDA, and to any and all changes in terms, covenants, and


conditions thereof; it being the intention hereof that Guarantor shall remain liable as a


principal until all Guaranteed Obligations shall have been fully satisfied, or this Guarantee


is otherwise terminated under Section 12 hereof, notwithstanding any act, omission, or


thing which might otherwise operate as a legal or equitable discharge of Guarantor.


4 Guarantor’s obligations as guarantor shall not be impaired, modified, changed, released, or


limited in any manner whatsoever by any impairment, modification, change, release, or


limitation of the liability of the Company or its estates in bankruptcy, resulting from the


operation of any present or future provision of the bankruptcy laws or other similar statute,


or from the decision of any court.


5 Beneficiary shall have the full right, in its discretion and without any notice to or consent


from Guarantor, from lime to time and at any time and without affecting, impairing, or


discharging, in whole or in part, the liability of Guarantor hereunder: (a) to extend, in


whole or in part, by renewal or otherwise, and on one or any number of occasions, the time


for the performance of any term or condition of the MDA; (b) to settle, compromise,


release, substitute, surrender, modify, or impair, to enforce and exercise, or to fail or refuse


to enforce or exercise, any claims, rights, or remedies, of any kind or nature, which


Beneficiary may at any time have against the Company.


6 This. Guarantee is an absolute, unconditional and continuing guarantee of performance and


not of collection.- Guarantor hereby agrees that its obligations hereunder are irrevocable,


and are independent of the obligations of the Company; that a separate action or actions


may be brought and prosecuted against Guarantor regardless of whether any action is


brought against the Company or whether the Company is joined in any such action or


actions; and Guarantor hereby waives the benefit of any statute of limitations affecting its


liability hereunder or the enforcement hereof.


7 In the event that Beneficiary retains or engages an attorney or attorneys to successfully


enforce this Guarantee, Guarantor shall reimburse Beneficiary for all expenses incurred,


including attorneys’ fees and disbursements in connection with such enforcement.


8 Guarantor shall have no right of subrogation whatsoever with respect to the Guaranteed


Obligations or to any collateral securing such obligations unless and until such obligations


have been paid in full.


9 Guarantor may not assign its obligations under this Guarantee to any Person without the


prior written consent of Beneficiary. Guarantor agrees that this Guarantee shall be binding


upon and enforceable against Guarantor and Guarantor’s successors or permitted assigns..


10 Guarantor hereby represents and warrants that: (i) the execution, delivery and performance


by Guarantor of this Guarantee and the fulfillment of and compliance with the terms and


provisions hereof have been duly authorized by Guarantor (with such authorization m full


force and effect), and do not and will not conflict with or violate any provision of its














r>.


 EXHIBIT 2B


FORM OF EXPLORATION GUARANTEE





THIS GUARANTEE (this “Guarantee”) is made as of_[_], 2011 by ELENILTO


MINERALS & MINING LLC and SESA GOA LTD, a Delaware and an Indian entities,


respectively (“•Guarantor"), to and for the benefit of the Republic of Liberia (“Beneficiary”).


WITNESSETH:


A. By a Mineral Development Agreement, dated as of August 3, 2011, made by and among


Beneficiary, Western Cluster Limited (the “Company”) and Guarantor (as such


agreement may be amended from time to time, the “MPA”), the Company has agreed to


execute and complete certain obligations upon the terms, and subject to the conditions set


forth in, the MDA.


B. The Company is directly or indirectly controlled by Guarantor or an Affiliate of the


Guarantor and Guarantor or one of its Affiliates will be considerably benefited by the


MDA.


C. At the request of Beneficiary, Guarantor has agreed to guarantee due performance of the


obligations of the Company as specified herein on the terms and subject to the conditions


set out herein,


NOW, THEREFORE, in consideration of the foregoing, and other good and valuable


consideration the receipt of which is hereby acknowledged and accepted, Guarantor hereby


agrees as follows:


1 Guarantor hereby irrevocably, unconditionally and absolutely guarantees any obligation or


liability of the Company under Section 10.1 of the Exploration Regulations with respect to


any Exploration conducted pursuant to the MDA, provided, that in no event shall


Guarantor be obligated to expend more than an amount in U.S. Dollars equal to \5%pf the


Approved Work Program pursuant to this Guarantee (the “Guaranteed Obligations”),


regardless of whether recovery on such Guaranteed Obligations may be or hereafter


become barred by any statute of limitations or such Guaranteed Obligations may otherwise


be or become unenforceable subject to clause 12.


2 Guarantor agrees that this Guarantee shall be deemed a continuing guarantee of those


Guaranteed Obligations. Guarantor hereby expressly acknowledges and agrees that,


notwithstanding anything to the contrary set forth in the MDA, for purposes of this


Guarantee, “Guaranteed Obligations” shall be deemed to include ail the obligations and


liabilities of any Affiliate of the Company to which such rights and obligations under the


MDA have been assigned.


3 Guarantor hereby irrevocably waives (i) diligence, presentment, protest, notice of dishonor,


demand, extension of time for payment, notice of non-payment, and indulgences and


notices of every kind, (ii) any lack of validity or enforceability of this Guarantee, the MDA


or any agreement or instrument relating thereto, and (iii) any other circumstance that might














v)


16 This Guarantee may be executed and delivered (including by facsimile transmission) in


two (2) or more counterparts, and by the different parties hereto in separate counterparts,


each of which when executed and delivered shall be deemed to be an original but all of


which taken together shall constitute one and the same agreement.





17 Capitalized terms used but not defined herein shall have the meaning assigned to them in


the MDA.


IN WITNESS WHEREOF, the parties have signed this Agreement, through their respective duly


authorized representatives, on the day, month and year indicated below.








Signed in ten (10) originals on the 3rd day of August, 2011.





























FOR BLOOM;








By: MR. P. K. MUK.HERJEE


DULY AUTHORISED REPRESENTATIVE











FOR SESA GOA:


--- .





By: MR. P. K. MUKHERJEE


DULY AUTHORISED REPRESENTATIVE


 If to Guarantor:


ELENILTO MINERALS & MINING LLC


Address: 160 Greentree Drive, Suite 101,


Dover, Kent Country,


Delaware 19904


Fax number: +972 3608 8455


Attention: Mr. Gal Chet


Email: gal@esglaw.co.il. alon@,engdinvcst.com


iacob@.engel invesl.com





BLOOM FOUNTAIN LIMITED


and


SESA GOA LTD


Address': Scsa Ghor,


Patio, Panjim,


Goa, India 403 00!


Fax number: +91 832 246 0816


Attention: Mr. P.K. Mukherjee


Email: pkm@yeda nta.co.in





Beneficiary and Guarantor may designate by notice in writing a new address to which any


notice, demand, request or other communication may thereafter be so given, served or sent.


Each notice, demand, request, or other communication which shall be delivered in the


manner described above, shall be deemed sufficiently given, served, sent, received or


delivered for all purposes at such time as it is delivered to the addressee.


13 This Guarantee shall be governed by and construed in accordance with the laws of England.


14 The parties agree that any suit, action or proceeding seeking to enforce any provision of, or


based on any matter arising out of or in connection with this Guarantee, or the transactions


contemplated hereby, shall be brought before the arbitration venue set forth in the MDA


and the provisions regarding arbitration in the MDA shall apply to this Guarantee.


15 If any term or other provision of this Guarantee is invalid, illegal or incapable of being


enforced by any rule of law, or public policy, all other conditions and provisions of this


Guarantee shall nevertheless remain in full force and effect so long as the economic or


legal substance of the transactions contemplated hereby is not affected in any manner


materially adverse to any party; provided, however, that this Guarantee may not be


enforced without giving effect to the provisions of Section I hereof. No party hereto shall


assert, and each party shall cause its respective affiliates not to assert, that this Guarantee


or any part hereof is invalid, illegal or unenforceable. Upon such determination that any


term or other provision is invalid, illegal or incapable of being enforced, the parties hereto


shall negotiate in good faith to modify this Guarantee so as to effect the original intent of


the parties as closely as possible in a mutually acceptable manner in order that the


transactions contemplated hereby be consummated as originally contemplated to the fullest


extent possible.








/


Guarantor is bound; (ii) no other action is necessary for Guarantor to enter into this


Guarantee; and (iii) this Guarantee constitutes a legal, valid and binding obligation of


Guarantor, enforceable against Guarantor in accordance with its terms.


11 This Guarantee shall remain in full force and effect and shall be binding on Guarantor, its


successors and permitted assigns until the satisfaction in full of the Guaranteed Obligations.


12 All notices, demands, requests and other communications to Beneficiary or Guarantor


hereunder must be in writing and shall be deemed to have been given: (i) on the date of


personal delivery; or (ii) if sent by facsimile to the numbers shown below and followed


with a telephonic confirmation or copy sent by first class mail, on the date of such


facsimile transmission; or (iii) when properly deposited for delivery by commercial


overnight delivery service, prepaid, on the date delivered, as set forth in the records of such


delivery service; and shall be addressed as follows:


If to Beneficiary:


T he Minister of Lands, Mines and Energy


Min istry of Lands, Mines and Energy


Capitol Hill


Monrovia,


Liberia


And .


The Minister of Finance


Ministry of Finance


Broad Street


P.O. Box 10-9013


Monrovia, Liberia


t


And


The Chairman, National Investment Commission


National Investment Commission


12th Street Sinkor


P.O. Box 10-9043


Monrovia, Liberia





i





With a copy to


The Minister of Justice


Ministry of Justice


Ashmun & Center Street


Monrovia, Liberia





/


payment in connection with the MDA, and to any and all changes in terms, covenants, and


conditions thereof; it being the intention hereof that Guarantor shall remain liable as a


principal until all Guaranteed Obligations shall have been fully satisfied, or this Guarantee


is otherwise terminated under Section 12 hereof, notwithstanding any act, omission, or


thing which might otherwise operate as a legal or equitable discharge of Guarantor.


Guarantor’s obligations as guarantor shall not be impaired, modified, changed, released, or


limited in any manner whatsoever by any impairment, modification, change, release, or


limitation of the liability of the Company or its estates in bankruptcy, resulting from the


operation of any present or future provision of the bankruptcy laws or other similar statute,


or from the decision of any court.


Beneficiary shall have the full right, in its discretion and without any notice to or consent


from Guarantor, from lime to time and at any time and without affecting, impairing, or


discharging, in whole or in part, the liability of Guarantor hereunder: (a) to extend, in


whole or in part, by renewal or otherwise, and on one or any number of occasions, the time


for the performance of any term or condition of the MDA; (b) to settle, compromise,


release, substitute, surrender, modify, or impair, to enforce and exercise, or to fail or refuse


to enforce or exercise, any claims, rights, or remedies, of any kind or nature, which


Beneficiary may at any time have against the Company.


This Guarantee is an absolute,.unconditional and continuing guarantee of performance and


not of collection. Guarantor hereby agrees that its obligations hereunder are irrevocable,


and are independent of the obligations of. the Company; that a separate action or actions


may be brought and prosecuted against Guarantor regardless of whether any action is


brought against the Company or whether the Company is joined in any such action or


actions; and Guarantor hereby waives the benefit of any statute of limitations affecting its


liability hereunder or the enforcement hereof.


In the event that Beneficiary retains or engages an attorney or attorneys to successfully


enforce this Guarantee Guarantor shall reimburse Beneficiary for all expenses incurred,


including attorneys' fees and disbursements in connection with such enforcement.


Guarantor shall have no right of subrogation whatsoever with respect to the Guaranteed


Obligations or to any collateral securing such obligations unless and until such obligations


have been paid in full.


Guarantor may not assign its obligations under this Guarantee to any Person without the


prior written consent of Beneficiary. Guarantor agrees that this Guarantee shall be binding


upon and enforceable against Guarantor and Guarantor’s successors or permitted assigns.


Guarantor hereby represents and warrants that: (i) the execution, delivery and performance


by Guarantor of this Guarantee and the fulfillment of and compliance with the terms and


provisions hereof have been duly authorized by Guarantor {with such authorization in full


force and effect), and do not and will not conflict with or violate any provision of its


formation or organizational documents or conflict with, or result in any breach of, or


constitute a default under, any agreement to which Guarantor is a party or by which


 FORM OF PARENT GUARANTEE





THIS GUARANTEE (this “Guarantee”-) is made as of August 3, 2011 by ELENILTO


MINERALS & MINING LLC, BLOOM FOUNTAIN LIMITED, and SESA GOA LTD


(collectively, “Guarantor” and each a Guarantor Entity), to and for the benefit of the Republic of


Liberia (“Beneficiary”).


WITNESSETH:


A. By a Mineral Development Agreement, dated as of August 3, 2011, made by and among


Beneficiary, Western duster Limited (the “Company”) and Elenilto Minerals & Mining


LLC, BLOOM FOUNTAIN LIMITED, and SESA GOA LTD (as such agreement may


be amended from time to time, the “MPA”), the Company has agreed to execute and


complete certain obligations upon the terms, and subject to the conditions set forth in, the


MDA.


B. The Company is directly or indirectly controlled by Guarantor or an Affiliate of the


Guarantor and Guarantor or one of its Affiliates will be considerably benefited by the


MDA.


C. At the request of Beneficiary, Guarantorhas agreed to guarantee due performance of the


obligations of the Company as specified herein on the terms and subject to the conditions


set out herein.


NOW, THEREFORE, in consideration of the foregoing, and other good and valuable


consideration the receipt of which is hereby acknowledged and accepted, each Guarantor Entity


hereby agrees, jointly and severally, as follows:


1 Guarantor hereby irrevocably, unconditionally and absolutely guarantees any obligation or


liability of the Company under, y undertaken in connection with the MDA (the


“Guaranteed Obligations”), regardless of whether recovery on such Guaranteed


Obligations may be or hereafter become barred by any statute of limitations or such


Guaranteed Obligations may otherwise be or become unenforceable.


2 Guarantor agrees that this Guarantee shall be deemed a continuing guarantee of those


Guaranteed Obligations. Guarantor hereby expressly acknowledges and agrees that,


notwithstanding anything to the contrary set forth in the MDA, for purposes of this


Guarantee, “Guaranteed Obligations” shall be deemed to include all the obligations and


liabilities of any Affiliate of the Company to which rights and obligations under the MDA


have been assigned.


3 Guarantor hereby irrevocably waives (i) diligence, presentment, protest, notice of dishonor,


demand, extension of time for payment, notice of non-payment, and indulgences and


notices of every kind, (ii) any lack of validity or enforceability of this Guarantee, the MDA


or any agreement or instrument relating thereto, and (iii) any other circumstance that might


otherwise constitute a defense available to, or a discharge of Guarantor under, applicable


law. Guarantor hereby consents to any and all forbearances and extensions of time of


(c) the Liberia Minerals and Mining Law of 2000 (the ‘‘Minina Lew"',, the Liberia


Revenue Code of 2000, the environmental laws and regulations of the Republic of


Liberia and all other applicable laws and regulations of the Republic of Liberia, as


such laws and regulations may from time to time be amended, modified or


supplemented (subject to the terms of the MDA).


4.2. The Licensee will be required under the exploration regulations to make detailed


quarterly reports of all field and sampling activities and results, and to make quarterly


deposits with the Ministry of all geological information and samples gained from its


exploration work in the Exploration Area, other than that position of the samples


subjected to destructive analysis or testing, in each case within specified periods after the


end of a quarter.





4.3. The term of this License is five years from the Effective Date, subject to any extension to


such term pursuant to and in accordance with the terms of the MDA and subject to the


earlier termination or relinquishment of this License pursuant to the terms of the MDA.


4.4. The address of the Licensee in Monrovia for notices relating to this License is as follows:


4


The Licensee may change this address to another address in Monrovia by notice to the


Minister at the principal office of the Ministry in Monrovia in the manner provided in


the Exploration Regulations.


4.5 If the Licensee discovers in the Exploration-Area exploitable deposits of the minerals





referred to in Section 1.2 of this License, subject to and in accordance with the terms of


the MDA and the Mining Law, the Licensee will have the right to obtain a Class A


Mining License for the mining of such deposits in accordance with the MDA, the


Mining Law and the applicable regulations of the Ministry governing the issuance of


and operations under a Class A Mining license.


SECTION 5. LICENSE BINDING ON GOVERNMENT.


This License is duly issued and binding on the Government of Liberia when signed by the


Assistant Minister for Mineral Exploration and approved by the Minister.


Signed: _


Assistant Minister for Mineral Exploration Ministry


of Lands, Mines and Energy


Approved:_____





Minister of Lands, Mines and Energy





DATE:








Insert address in Monrovia at which hand deliveries will be accepted during business hours











1


 EXHIBIT IB





FORM OF MINERAL EXPLORATION LICENSE


This License is hereby granted by the Government of Liberia, through the Ministry of Lands,


Mines and Energy (the “Ministry11), to 1





(the “Licensee”).





SECTION 1. SCOPE OF LICENCE


1.1. This License entitles the Licensee to explore for the minerals identified in Section 1.2 of


this License in the exploration area defined in Section 3 of this License (the


“Exploration Area”) in order to ascertain the existence, location, quantity and quality or


commercial value of deposits in the Exploration Area of such minerals.


1.2. The minerals covered by this License are the following:'


SECTION 2. EFFECTIVE DATE


The effective date of this License is__________.


SECTION 3. EXPLORATION AREA


The Exploration Area, which covers approximately sq kin.' is the area defined by the


UTM coordinates of SPATIAL REFERENCE (WGS84 UTM GRID ZONE 29N) set forth


below:


[insert table]


SECTION 4. CONCERNING THE LICENSE


/


4.1. This License and the rights of the Licensee hereunder are subject to


(a) the terms of the MDA,


(b) the exploration regulations issued by the Minister of Lands, Mines and Energy (the


“Minister”) pursuant to the authority granted the Minister under the Liberia Minerals


and Mining L.aw of 2000 (the “exploration regulations”) (subject to the terms of the


MDA), and








Insert full legal name of Licensee


Identify here the minerals or mineral groups covered by this License


Insert license area in square kilometres


 ANNEX I to the MINING LICENSE





DEFINITION OF THE PROPOSED PRODUCTION AREA


The Proposed Production Area encloses approximately ... sq km.





The boundary of the Proposed Production Area is shown on drawing [_].





The area is defined by the UTM coordinates of SPATIAL REFERENCE (Insert


reference) set forth below:





Vertices Northing Easting


1


2


3


4


5


6


7


8








(See map on following page)




















/


Made in Monrovia, this _day of_, 20





MINISTER OF LANDS, MINES & ENERGY














Name-.





ACKNOWLEDGED AND AGREED:


By: WESTERN CLUSTER LIMITED











Name:


Title:




















/


(4; ju ;v,_y .ii-j^iJia'iness oJ'ihc mining project, mid other financing costs incurred in connection with


operations and paid to an affiliate or to a third party, for the tax period incurred, subject to the special rule


ofSection 708.


(5) Exploration and development expenditures as specified in Section 709.


;/:) Paymenls to a Government-approved trust fund for mining reclamation, subject to the specific limitations


set out in Section 710.


(7) Any taxation amount determined under Section 730 and paid during the tax period.


(8) Subject to the provisions of Chapter 2, management fees paid, whether to an affiliate or u> a third party, but


not the amount in excess of 2 percent of other operating expenses incurred for the tax period.


(9) Subject to the provisions of Section 203(c), the amount of bad debt incurred, so long as that amount was


subject to income taxation in a prior tax period.


(10) Charitable contributions made in Liberia to a qualifying organization within the meaning of section 205(b)


for educational or community development projects, social welfare, or medical purposes, or for the


prov ision of other social services.


(11) Expenses related directly to the mining project's "other income" under subsection (a)(2), to the extent


otherwise allowable as a deduction under Chapter 2 and this Chapter.


(c) Deductions i\ot Allowed. The following expenses are not allowed as a deduction from gross income:


(1) A payment to an expatriate employee as reimbursement for taxes and duties paid by the employee to the


Government.


(2) A loss Irom a hedging transaction.


(3) An incentive deduction allowed by Section 204(d).


(4) An amount otherwise allowable as a special tax incentive deduction by Section 16.


SECTION 706. SPECIAL RULE FOR DEPRECIATION


(a) Commencement of Period. For property placed in service before commercial production begins, the period for


depreciation of property deseibed in Section 204(b) (the cost of which is attributable to a mining production


project) begins in the first tax period in which the mining production project’s commercial production begins.


(1) Up-front payments that arc mandatory under a contract are treated as the post of property placed in service


before commercial production begins, and arc to be amortized over a period of 10 years.


(2) The costs of community development contributions or social contributions that are mandatory under a


contract are deductible in the year incurred.


(b) Tangible Moveable Property. The cost of tangible moveable property shall be recovered over the period and by


the method described in Section 204(b)( I).


(c) Five-Year Cost Recovery Period.


(1) [n place of the 15-year period set out in Section 204(b)(2) and (3) for recovering the cost of tangible fixed


property and intangible property, a mining project is allowed to recover the cost of a mining production


asset on an asset-by-ns.sei basis using the straight-line method over a five-year period at the rate of 20


percent per year.


(2) i'he term “mining production asset”means---


(A) Tangible fixed property used directly in the mining and quarrying of metallic and nonmetallic minerals


and the milling, beneficiatioii, and other primary preparation of minerals, but not equipment used to


smelt, reduce, refine, or process minerals or mineral ores; and


(B) Intangibles acquired to develop the site, for example the cost of ground-cover stripping, preparation of


waste dumps, emplacement of haulage roads, and similar pre-development expenditures.


(d) /5-Year Cost Recovery Period. A mining project’s other tangible fixed property and intangible property shall be


depreciated on an asset-by-asscl basis over a 15-year period or the expected period of commercial production


(whichever is shorter) using the straight-line method.


'0| Termination of Project, if a mining project is terminated before the end of the cost recovery* period, the


remaining unrecovered cost is treated as an expense deduction in determining taxable income for the tax period


in which the project is terminated.


SECTION 707. SPECIAL RULE FOR NET OPERATING LOSS CARRYFORWARD


For the purposes of determining taxable income of a mining project, the Section 203(e) period for


carryforward of net operating loss shall begin with the first tax period in which commercial production begins and


shall be seven years.


SECTION 708. SPECIAL RULE FOR INTEREST DEDUCTION


(a) Interest incurred in a tax period and subject to the limitation of Section 203(d) may be carried


forward to the next tax period.


(b) The amount of the carryfoiward is treated as interest inclined in the subsequent period, and is


deductible to the extent permitted under Section 203(d)


(c) The interest carryforward allowed by this section does not expire.


SECTION 709. SPECIAL RULE FOR MINING EXPLORATION AND DEVELOPMENT


EXPENDITURES


Mining exploration expenses and mining development expenses are attributable to a mining


production project under the rules of Section 700 and arc deductible in the first lax period in which commercial


production begins.


SECTION 710. SPECIAL RULE FOR DECOMMISSIONING EXPENSES


(a) Qualification. A mining project's payment for decommissioning expenses is deductible from gross income


under Section 705(b) only in the amount paid during the tax period---


(1) To defray reclamation or decommissioning expenses upon cessation of commercial production, and


remedying damage caused to land used by the project or environmental damage the project may have


caused (including damage that extends beyond the mining license area), but not if drawn from a trust fund


described in paragraph (2); or


(2) To att approved trust fund established to defray future expenses of the type specified in paragraph (1),


subject to any limitations or requirements specified in regulations.


(b) Recapture. An amount taken as a deduction under subsection (a) but not used for the specified purpose---


(1) If remaining after the tax period in which commercial production ends, shall be included in income for the


following (ax period; or


(2) If used for another purpose, shall be included in income in the tax period within which the amount is so


used.


SECTION 711. TREATMENT OF PROPERTY TRANSFERS


(a) General Rule. Unless an exception applies under this Chapter, a mining project's gain or loss


on the transfer of depreciable property used by the project is treated in accordance with section 20*1. Transfer of non-


depreciable propert) used in .no uusiiies:;, 01 traiss(ci of properly other than properly connected with mining, is


determined in accordance with the property transfer rules of Section 207.


(b) Special Cases.


(!) Hedging. Hedging transactions by a mining project are taxable as a separate business activity, and hedging


gains and losses incurred are not includible or deductible in determining taxable income of the project or


for the purposes of Section 730.


(2) Investment Gain. Gain on property the project holds for investment is determined under Section 207 and


is includible in income of a project, except to the extent reduced by investment loss under the rule of


Section 203(b)(2).


SECTION 712. SUCCESSOR AGREEMENT; TRANSFER OF INTEREST IN MINING PROJECT


(a) Successor Agreement. If an agreement for a mining project (the "original agreement") is terminated and a new


agreement (the "successor agreement") is entered into with the same producer for the same geographic area (the


"successor project"), the project's loss carryforward existing at the termination date of the development


agreement is deductible in the first tax period of the successor project under the successor agreement, provided:


(1) The whole of the geographic area covered by the contract area of the successor agreement is within the


contract area of the original agreement; and


(2) The successor agreement entered into force within one month following the termination of die original


agreement


(b) Transfer of Interest. If the bolder of an interest in a mining project transfers that interest---


(1) The taxable income of the project shall continue to be determined using the tax cost and other tax attributes


applicable at the date of the interest transfer; and


(2) The transferor of the interest shall determine gain or loss under Section 207, which also applies to


determine the transferee's tax cost in the interest.- • ’


(O Contract Area. For the purposes of subsection (a), the term ‘‘conlracl area” means mineral exploration license


area or mining license area, whichever is applicable.


SECTION 713. TRANSACTIONS BETWEEN RELATED PERSONS


(a) General Rule. A mining project’s gairt, loss, and other lax consequences in transactions with related persons are


determined in accordance with ihe definitions in Section 10 (in Part I, General Provisions), and the provisions


of this Part, especially Section 207, Property Transfers; Section 208, Related Persons; Section 209, Finance


Leasing; Section 210, Income Splitting, and Section 211, Transactions Between Related Persons.


(c) Disclosure. A mining project producer must---


(1) Disclose the existence of related-party transactions and contemporaneously document the manner in which


prices are set in transfers to related persons;


(2) Notarize an agreement governing a related-party transaction in accordance with the law of the related


person's country of residence; and


(3) Upon request of the Ministry', provide copies of agreements and other documents substantiating the


existence of related-party transactions and the manner by which prices are set.


(d) Advance Pricing Agreement. The Government of Liberia and a producer may agree to a transfer pricing


methodology in an advance pricing agreement in accordance with Section 18.


(e) Regulations. The Minister is required to issue regulations clarifying, to the degree feasible, the reference prices,


comparables, and standards that will be used to evaluate transfer prices. Regulations are required to take into


account the Guidelines described in Section 18(b).


SECTION 714. PARTNERSHIPS AND JOINT VENTURES


(a) Pass-Through of Tax Attributes. If a mining project producer is organized as a partnership or similar form of


unincorporated joint venture, the mining project's income, expenses, loss, credits, and character of income or


loss shall be attributed to the partners in accordance with their interests (including the items specified in Section


705). for the purpose of determining taxable income, loss, credits, and lax liability separately for each partner.


(b) Application of Other Rules. If subsection (a) applies---


(1) The provisions of this Chapter shall apply separately to each partner;


(2) Each partner shall be considered a taxpayer for purposes of this Pari (Part If, Income Tax) and a mining


project producer for purposes of this Chapter, and shall be liable for income tax as determined under this


Chapter.


SECTIONS 715-729. RESERVED


SECTION 730. SURTAX ON INCOME FROM HIGH-YIELD PROJECTS


(a) Purpose. This section applies to determine whether a mining project is sufficiently high-yield to be subject to


surtax and, i F so, the amount of tax.


(b) Definition of High-Yield. A mining project is considered high-yield and thus subject to surtax when the


project’s pre-tax rale of return on total investment is greater than 22.5 percent, the threshold rate of return for


application of this Section.


(c) Method to Calculate Yield. A mining project's accumulated negative net cash flow shall be determined by


applying an annual accumulation factor of 1.225 to negative net cash Row carried forward from a prior tax


period. At the close of each tax period, accumulated negative net cash flow earned forward from the prior


period shall be increased by current negative net cash flow or offset by current positive net cash flow. A project


is not high-yield and subject to surtax unless its accumulated net cash flow at the close of a period is positive.


(d) Surtax Rate. Positive net accumulated cash flow at the close of a tax period is taxable at a rate of 20 percent,


and the amount of this liability is deductible from gross income for the tax period in accordance with Section


705(b).


(e) Re-Set Accumulation to Zero. Following a tax period for which tax is due under tiiis section, a mining project's


accumulated negative cash flow is re-set to zero and (he method of subsection (d) is re-applied using zero as the


starting point for the succeeding lax period.


(I) Steps to Calculate Yield. Beginning with the first tax period in which a mining project has a Class A mining


license and has begun construction, the following steps are used to calculate yield in accordance with subsection


(c).


(1) Cost. State the expenditures, as specified in Section 731, for the tax period. This is the project's cost


through the dose of the period. Go to Step 2.


(2) Revenues. State the project's revenues, as specified in Section 732, for the tax period, including revenues,


if any, from the exploration period as defined in Section 700. This amount is the project's revenues


through the close of the period. Go to Step 3.


(3) Test Net Cash Flow.


(A) Determine net cash flow. Subtract from revenues the amount of cost to arrive at net cash flow (R • C =


NCF).


(B) Net cash flow zero or negative. If net cash flow is zero or negative, the project is not yet a high-yield


project and the surtax does not apply. Multiply the negative net cash flow by 1.225 to arrive at the


project's accumulated negative net cash flow to be carried to the next lax period. Go to Step 4.


(C) Net is positive. If riet cash flow is positive, tax is determined under subsection (d), and this amount is


deductible in determining taxable income under Section 703. Accumulated negative net cash flow is


te-set to zero in accordance with subsection (e), Go to Step 4.


(4) Reprise. Re-apply steps (1) through (3) for each succeeding tax period, beginning with the period after the


one tested under Step 3


(A) Add costs incurred in the succeeding period to any accumulated negative net cash flow carried from


the prior period (zero if re-set) as under Step 1. Go to (B).


(B) State revenues for the succeeding period as under Step 2. Go to (C).


(C) Test net cash flow as under Step 3.


SECTION 731. DETERMINATION OF EXPENDITURES FOR SECTION 730 PURPOSES





(a) Expenditures Counted. For the purposes of determining cost under Section 730(g)(1), a mining


project's expenditures for a tax period is the sum of the following amounts incurred during the period, and


does not include the amount of any income tax paid:


(1) Expenses deductible in computing taxable income, but not the allowance for


“ depreciation or interest and finance charges or the surtax deduction under Section


705(b)(7);


(2) Capital expenditures to acquire or construct a tangible or intangible asset for use


in mining operations, but not an addition to (or reduction in) working capital; and


(3) Mining exploration expenditures, mining development expenditures, and capital


j goods expenditures as defined in Section 700. For a project's first tax period, include


^ expenditures for prior exploration, development, and capital goods attributable to the


project under Section-700(h).


(b) Transfer of interest.. Consideration paid for transfer of an interest in a mining project is


disregarded in determining the project's total expenditures.


(c) Only Production Expenditures. If an amount referred to in subsection (a) is related to


commercial production as well as to some other non-production activity of a mining project, only the


amount attributable to commercial production is included in determining the project’s total expenditures.


SECTION 732. DETERMINATION OF TOTAL REVENUES





f


(a) Revenues Counted. For purposes of Section 730(0(2), a mining project's total revenues fora tax period is the


sum of the following amounts:


(1) The project's gross income for income tax purposes for the tax period, including amounts


from hiring or leasing-out property or the granting of t ights to use property (but not including


interest income);


(2) The project's consideration received for the tax period for the disposal, destruction, or


loss of any property (including materials, equipment, plant, facilities, and intellectual property or


rights) used in mining operations if the expenditure incun-ed in acquiring the property was


deducted in computing the project's net cash flow for any tax period;


(») Any amount received for the tax period for provision of information or data obtained





from any survey, appraisal, or study relating to mining operations, if the expenditure incurred in


undertaking the survey, appraisal, or study was previously deducted in computing the project’s net


cash flow for any lax period;




















1


(4) Any other amount received for the tax period that is a reimbursement, refund, or other


recoupment of an amount previously deducted in computing the net cash flow of the project for


any tax period; and


(5) If property used in mining operations has been destroyed or lost, any compensation,


indemnity, or damages the project received in respect of the property under an insurance policy,


indemnity agreement, settlement, condemnation action, or judicial decision.


(b) Transfer of Interest. Consideration received for transfer of an interest in a mining project is not included in the


project's total revenues.


(c) Only Production Revenues. I fan amount referred to in subsection (a) is related to commercial production as


well as to some other non-production activity of a mining project, only the amount attributable to commercial


production is included in determining the project's total revenues.


SECTIONS 733-739. RESERVED


SECTION 806. WITHHOLDING OF TAX ON PAYMENTS TO NONRESIDENTS


(a) Payments. A person listed in this subsection who makes a payment of the kind specified in this section is


required to withhold tax at the rate specified in this section. The payor is treated as a withholding agent for all


purposes of this Code. This subsection applies to the following types of persons:


(1) a resident legal or natural person;


(2) a nonresident's permanent establishment in Liberia;


(3) a government agency;


(4) unless expressly exempted by international agreement or treaty, a nongovernmental organization operating


in Liberia or a diplomatic mission to Liberia;


(5) A foreign corporation authorized to do business in Liberia.


(b) Interest, Dividends, Royalties, License Fees, And Similar Payments. A payor who makes a payment to a


nonresident of Uberia-source non-exempt interest, dividends, royalties, license fees, a payment in respect of


mineral rights, or other income (except rent) derived from rights in property (including any form of intellectual


property) is required to withhold tax at a rate of 15 percent ofthe amount of the payment.


(c) Gaming Winnings. A payor who makes a payment to a nonresident of winnings from gaming within Liberia is


required to withhold tax at a rate of 20 percent of the amount ofthe payment.


(d) Payers of Rent. A payor who makes a payment to a nonresident of Liberia-source rent is required to withhold tax


at a rate Of 15 percent of the amount of each payment.


(e) Payments for Services Rendered A payor who makes a payment to a nonresident for Liberian-source services


rendered is required to withhold tax at the rate of 15 percent ofthe amount ofthe payment if payment is of a


son that, if made to a resident, would be includible in gross income under Section 20! (including Board fees,


management fees, commissions, and the like).


(f) Special Rule for Payments by Mining Projects, Petroleum Projects, anti Renewable Resource Projects. In lieu


of the rates otherwise applicable under this section, in the case of the following types of Liberian-source


payments to a nonresident, which for the purpose hereof is considered a Liberian-source for the payee, made by


a mining project producer, petroleum project producer, or renewable resource project contract holder, the


withholding rates stated below shall apply to the following withholding obligations---


(1) Interest, 5 percent.


(2) Dividends, 5 percent.


(3) Payments for services, 6 percent.


(g) Payments of Acquisition Price. Upon the payment to a nonresident of the acquisition price for an interest in an











4) v











V


investment asset in Liberia, (he payor is required to withhold tax at the rate of 15 percent of the amount of the


payment and pay it over to the Government of Liberia in accordance with the rules of subsection (h).


(!) For purposes of this subsection, the term "investment asset” means a direct or indirect interest in real


property located in Liberia, shares of stock ill a resident legal person, or an ownership interest or rights in a


partnership, joint venture, or similar arrangement that has significant operations, property, or property


rights in Liberia.


(2) This subsection does not apply if the investment asset is an ownership interest in a legal person described in


Section 801(b) or (c).


(h) Withholding Requirements, Remittance, And Statement. Within 10 days after the last day of a month, a payor


who has made a payment to a nonresident is required to remit to the tax authorities the total amount required to


be withheld during that month, Each remittance of tax under this section must be accompanied by a statement


specifying the name and address of each nonresident to whom a payment was made, the type and amount of each


payment, and the amount of tax withheld (and, if the Minister requests, underlying documentation in accordance


with Section 55, including contracts). If the withholding agent is a resident, the place for remittance is the


withholding agent’s filing location (as designated in Section 50). If the withholding agent is a nonresident, the


place of remittance is the Ministry of Finance.


(i) Election. A nonresident subject to tax under this section may elect to file an income tax return by submitting it at


the time and in the manner required by Pan I and Chapter 9 of this Code, and is thereby required to pay the


amount of income tax on taxable income specified in Section 200 or Section 201. An amount of tax withheld


pursuant to Section 806 is creditable against income tax liability and refund of an overpayment may be available


as described in Section 72. A nonresident’s election to file an income tax return is effective for the tax period for


which the election is made and lor the next four succeeding tax periods.


(j) Payments by Government Agency. A government agency that makes a payment to a nonresident in circumstances


other than those governed by subsections (a) through (g) is required to withhold a portion of the payment as


specified in regulations, but not more than 4%.


.SECTION 905. WITHHOLDING OF TAX ON PAYMENTS TO RESIDENTS


(a) Payments. A person listed in this subsection who makes a payment of (he kind specified in this section is


required to withhold lax at the rate specified in this section. The payor is treated as a withholding agent tor all


purposes of this Code. This subsection applies to the following types of persons:


(1) a resident legal or natural person;


(2) a nonresident with a branch in Liberia or doing business in Liberia;


(3) a government agency; or


(4) unless expressly exempted by international agreement or treaty, a nongovernmental organization operating


in Liberia or a diplomatic mission to Liberia.


(b) Interest, Dividends, Royalties, License Fees, and Similar Payments. A payor who makes a payment to a


resident of non-exempt interest, dividends, royalties, license fees, or other income (except rent) derived from


rights in property (including any form of intellectual property), including a payment in respect of mineral rights,


is required to withhold lax at a rate of 15 percent of the amount of the payment


(c) Gaming Winnings. A payor who makes a payment to a resident of winnings from gaming within Liberia is


required to withhold lax at a rate of 20 percent of the amount of the payment.


(d) Payers of Rent A payor who makes a payment to a resident of rent is required to witlihold tax at a rate of 10


percent of the amount of each payment if the total amount of rental payments made during a 12-month period is


expected to be $70,000 or more.


(c) Payments of Wages or Salary to Employees. A payor who makes a payment of wages or salaries to an employee


in an amount that during the tax year exceeds the standard deduction amount of Section 205(a) is required to


withhold tax from each payment in accordance with the income tux rates specified in Section 200(a).














v I


(0 Payments for Services neuaered.


(a) If a payor makes a payment to a resident for services rendered, and the services are not the subject of a contract


of employment, (he payor is required to withhold lax at the rate of 10 percent of the amount of the payment,


(b) This subsection applies only if---


(1) the payment is of a soil includible in gross income under Section 201 (including Board fees, management


fees, commissions, and the like); and


(2) the payment is S 100,000 or more (or of any amount if the total amount of payments made to the payee is (or


is expected to be) $1,000,000 or more for the payer's tax year).


(c) A payment for the acquisition of goods is not a payment for services rendered. If the payment is for a mixture of


goods and services, withholding is required only on the portion of the payment that is allocable to the services.


(g) Payments of Acquisition Price. A payor who makes a payment to a resident representing all or part of the


acquisition price of an investment asset in Liberia is required to withhold tax at the rate of 10 percent of the


amount of the payment.


(1) For purposes of this subsection, (he term "investment asset” means a director indirect interest in real


property located in Liberia, shares of stock in a resident legal person, or an ownership interest or rights in a


partnership, joint venture, or similar arrangement that lias significant operations, property, or property


rights in Liberia.


(2) This subsection does not apply if the investment asset is an ownership interest in a legal person described in





Section 801(b) or (c).


(h) Special Rule for Payments by Mining, Petroleum, and Renewable Resource Projects and Registered


Manufacturers. In lieu of the rates otherwise applicable under this section, in the case of the following types of


payments made to a resident by a mining project producer, petroleum project producer, or renewable resource


project contract holder, the withholding rates stated below apply to the following withholding obligations---


(!) Interest. 5 percent.


(2) Dividends, 5 percent.


(3) Payments for services, 6 percent.





(i) Payments to High-Risk Suppliers. If a payor makes a payment to a high-risk supplier of goods, the payor must


withhold tax at the rate (not to exceed 20 percent) specified in regulations. The term “high-risk supplier” means


a person in a category of suppliers identified in regulations as presenting a high risk of (ax avoidance.


(i> Withholding Requirements, Remittance, And Statement. Within 10 days after the last day of a month, a payor


described in (a) is required to remit to the tax authorities the total amount required to be withheld during that


month. Each remittance of tax under this section must be"accompanied by a statement specifying the name and


address of each resident to whom a payment was made, the type and amount of each payment, and the amount


of lax withheld (and, if the Minister requests, underlying documentation in accordance with Section 55,


including contracts). The place for remittance is the payor’s filing location (designated in Section 50).


(k) Treatment Of Withholding. A person who has had tax withheld from a payment during a tax period may claim a





credit against income tax due on the income tax return for that period. A person not otherwise required to file an


income lax return may elect to file a return to establish entitlement to credit or refund The rules of Section 72


apply to an overpayment of tax withheld under this section.


(I) Information Reporting for Payments to Resident Legal Person. If a payor described in (a)makcs a payment


that would be subject to withholding under subsection (f) if made to a natural person, but is made to a resident


legal person, then the payor (while not required to withhold tax on such payments) is required to provide the tax


authorities with a statement setting out the name, address, and taxpayer identification number of each payee to


whom such payments were made, the amount of the payments, and related information icquestcd on the form


special! by ilic .Yiinsici. ; !>»• si;.;e:m:i;. is dec within 15 days after tilt; las; .jay ilu month in which a payment


is made. The place for filing the statement is the withholding agent’s filing location (designated in Section 50).


(m) Penalties. A person who has a withholding obligation under this section and fails to withhold and remit the


amount of tax required to be withheld is subject to the Section 52 penalty for late payment and failure to pay.


For the purpose of applying the Section 52 penalty to a failure to withhold and remit tax, references in Section


52 to the “payment due date” are to be understood as referring to the remittance due date under this section. A


person who fails to provide the lax authorities with a required statement under subsection (I) is subject to a fine


of $10,000 for each required statement not provided.


(u) Payments by Government Agency. A government agency that makes a payment to a resident in circumstances


other than those described in subsections (a) through (i) is required to withhold a portion of the payment as


specified in regulations, but not more than 4%.





-SECTION 1001. TAXABLE SUPPLY


»+*


< e) Exempt Supply. The following supplies are exempt supplies---


■***


(6) Subject to subsection (1), a supply made to a registered manufacturer; a renewable resource contractor


subject to Part II, Chapter 6 and in the business of agriculture; a mining project producer or petroleum


project producer subject to Part II, Chapter 7; or the holder of a Forestry R esource License engaged in the


business of forestry, if the supply is of---


(A) raw materials or other inputs for use directly in manufacturing;


.(B) raw materials for use directly in forestry;





(C) '/aw materials for use directly in a renewable resource project described in Pan II, Chapter 6;


(D) raw materials for use directly in a mining project or petroleum projeci described in Part II,


Chapter 7; and


(E) capital goods.





(g) Definitions In this Part, unless the context otherwise requires -


(5) Capital Goods. The term "capital goods" means---


(A) Plant or equipment (but not motor vehicles of any kind), and spare pans for these goods, for use


exclusively and directly in manufacturing, agriculture, or forestry.


(B) The following goods for a producer's use exclusively and directly in a mining or petroleum projeci or


in mining or petroleum exploration or development:


(i) Plant or equipment (including four-wheel-drive motor vehicles but not motorcycles, sedans or


luxury vehicles as defined by regulation) and spare pans for these goods; and


(ii) From the inception of exploration until the date commercial production begins, intermediate inputs


(including but not limited to explosives, drilling mud, grinding balls, tires for trucks used in


operations, and similar items specified in regulations).


SECTION 1702. IMPORT DUTIES


(a) Levy and Payment. Customs import duties shall be levied on and paid by the importer in respect of goods


listed in this Chapter's Schedule !, External Tariff Schedule at the rates specified therein.


(b) Exception. In the case of an impon qualifying under Section i 708 for exemption from import duty, no duty is


payable. An exempt import is nonetheless subject to the Customs User Fee described in Section 1802.


SECTION 1708. EXEMPTION FROM IMPORT DUTIES


(b) Special Rule for Mining and Petroleum Projects During the period from the inception of exploration until the


date commercial production begins, a Chapter 7 mining project or petroleum project is allowed an import duty


exemption of the following goods


(1) Plant or equipment (including four-wheel-drive motor vehicles but not sedans or luxury vehicles as defined


by regulation) and capital spare parts for these goods;


(2) Intermediate inputs (including but not limited to explosives, drilling mud, grinding balls, tires for trucks


used in operations, and similar items specified in regulations); and


(3) Raw materials, except that no exemption is permitted from the 10 percent duty on gasoline and gas oil.


SECTION 1802. CUSTOMS USER FEE


(a) Minister’s Authority to Set Fee. The Minister has the authority and obligation to fix just and reasonable fees to


be charged by the Bureau of Customs or on its behalf for issuing documents and performing other services in


connection with the operation of the Customs service, including pre-shipment inspection, that are not set forth


herein or in any other statute or regulation, and must do so by regulation and by widely circulated notice.


(b) Fee Limit on Imports. The Customs user fee for imports must not exceed 1.5 percent of (he CIF Liberian Port


value of imported goods or US S 10,000 per item, whichever is less.


(1) Except as specified in (2), the fee applies to all imports at all borders regardless of whether the goods are


exempt from import duty because it is intended to cover the cost of the inspection service for non-exempt


persons and the duty-free service for exempt persons.


(2) Petroleum products are exempt from the import Customs user fee.


(3) If an import is entered solely for the purpose of transshipment out of Liberia, it is not subject to the fee in


this subsection (b) but is subject to the fee descr ibed in subsection (c).


(c) Fee Limit on Exports. No Customs user fee shall be levied on any export except for unprocessed exportables,


semi-processed exportables, and goods in transshipment. The fee for goods in transshipment or unprocessed


exportables must not exceed 2.5 percent of the FOB value. The fee for semi-processed exportables must not


exceed 1.25 percent of the FOB value. The fee uppliesrfcgardless of whether the goods are exempt from export


duty.


(d) Scunning Fee. The Minister is empowered to charge a lee directly related to the scanning of cargo containers.


The fee must be proportionate to the length of the container, and may not exceed US $7 per foot.


SECTION 2009. EXEMPTIONS


The following categories of real properly shall be exempt from real property taxes:


(i) Real property within a mineral exploration license area, a mining license area, or a petroleum area and used


for a mining project or petroleum project subject to Part II, Chapter 7.


 EXHIBIT 4


THE PRICING AGREEMENT








[To be attached after Effective Date pursuant to Section 15.3(c)]


 EXHIBIT 6





Principles Relating to Community Funding











Subject to the following paragraph, the Annual Social Contribution shall be deposited and held


in one or more separate segregated accounts as determined by the Government from time to time


for use in accordance with Section 8 and this Exhibit 6.


Where any audit conducted pursuant to Section 8.2(b) demonstrates a material discrepancy


between the actual disbursements or expenditures made pursuant to Section 8.2 and the budgeted


and/or reported disbursements or expenditures as determined by the Committee, the Company


shall be entitled to require that the monies be retained in an escrow account pending an


agreement between itself, the Government and the Committee regarding an alternative funding


mechanism be established for the purposes of managing the contributions and disbursements


made pursuant to Section 8 (forjjxample, through the establishment of a trust arrangement).


The following principles shall be applied to any particular project or activity within the Program:


Governance of the community development and infrastructure investments


• Selection of the community development and infrastructure projects shall be apolitical and


completely transparent.


• No direct payments to individuals will be made, .save-for the purpose of paying for goods


or services duly rendered in the execution or oversight of one or more funded projects


which has been authorized by the Committee.


• The Company retains the right to independently audit (at its own expense) any


disbursement or expenditure made from the Annual Social Contribution or any project


supported with funds from the Annual Social Contribution.


• Other that/the obligations set forth in Section 8.2 of the Agreement, the Company will


have no further obligations with respect to any project supported with funds from the


Annual Social Contribution, including, but.not limited to, any on-going or periodic


maintenance and repair costs or other operational costs in connection with the projects


funded by the Program Budget.


Project Selection Criteria and Process





Members of the Committee will work collaboratively to identify, prioritize, and select


appropriate community development and Infrastructure projects.


 EXHIBIT 7








Intermediate Inputs and Consumables





Jm. Description Examples


Capital Mining Operations Drill rigs, trucks, shovels, loaders, dozers,


scrapers, graders, geophysical logging vehicles,


excavators, compactors, etc.


Mine Infrastructure Camp equipment, pipes, power systems (inch


transformers, switch gear, transmission tines,


substations), pit pumps, communications


equipment, etc.


Bcneficiation and Feeders, grinding mills, crushers, screens,


Processing chutes, conveyors, flotation machines, spirals,


magnetic separators, filters, centrifuges, pumps,


i piping & valves, reservoirs and tanks, electric


motors, process control equipment,


hydrocyclones, thickeners, samplers, online


analyzers, laboratory equipment, etc.


Stockpiling and Train Feeders, stackers, reclaimers, train loadout,


Loading hoppers, bins, etc.


Miscellaneous Equipment Bob cats, low loaders, cranes, forklifts, 4WD


and other vehicles (excluding luxury sedans),


buses, workshop equipment, tools, fuel truck's,


explosives trucks, mine rescue vehicles.


I Housing, medical and All equipment, furniture, appliances, and other


offices fittings required in connection with the


construction of offices and other buildings,


portable accommodation facilities housing and


medical centersf and furnishing of those


buildings, etc.


IT and communications AIL IT and electrical equipment, including


equipment computers, printers, screens, projectors,


satellite, radio and other transmission and


reception equipment, etc.


Railway & Rolling stock Rail wagons, loco’s, rail track, sleepers, ballast,


control and signaling equipment, etc.


Port & Maritime Stockpiling yards, stacker, reclaimers,


conveyors, chutes, hoppers, ship loaders, tug


boats.


Consumables Reagents Flocculants, flotation reagents, oil, grease,


and heavy media, lubricants, etc.


Intermediate Grinding Equipment Grinding rods, grinding balls, lifters, liners,


Items grinding media, etc.














/ // r'>


v.








Type Description Examples


Earthmoving Equipment Engine parts, ground engaging implements,


tires, wheels, blades, tracks, buckets,


attachments, etc.


Mineral Ex[)loration Drilling consumables and spare parts,


exploration consumables and equipment,


analytical instruments, etc.


Processing Equipment Screen frames, sub frames, screen panels,


sprays, underpans, centrifuge baskets, cyclone


nozzles, cyclone bodies, pipes, valves, hoses,


pump impellors, liners, agitators, pump casings,


belts, guards, conveyor belts, rollers, idlers,


scrapers, pulleys, etc.


Power Coal, HFO, LPG, other hydrocarbons (except


diesel and gasoline), etc.


Social infrastructure Consumables for use in the medical centers and


schools.


Misc Explosives, equipment spare parts, vehicle


parts, tools, nuts and bolts, shovels, picks,


ropes, welding supplies, gas, electrical fittings


and components, IT and office supplies and


stationery, safety equipment (PPE etc), etc.






















































































-A


 EXHIBITS





FORM OF DEED OF ADHERENCE


THIS DEED OF ADHERENCE is made


on 201 [*] and is SUPPLEMENTAL to a mineral


development agreement dated [__) [_|, 2011 and made between The Government of the


Republic of Liberia, Western Cluster Limited, Eleninlto Minerals & Mining LLC, Sesa Goa Ltd


and Bloom Fountain Ltd, as amended from time to time (die “MDA”).


WHEREAS:


1/


(A) By a transfer dated [•] 201[*], (insert name and address of transferor] (the ‘‘Old


Shareholder”) transferred to [insert name and address of transferee] (the “New


Shareholder”) Control in the Company.


(B) This Deed is entered into in compliance with the terms of Section 27.7 of


the MDA.


NOW THIS DEED WITNESSES AS FOLLOWS:


1 This Deed is made for the benefit of the original parties to the MDA and any other person


or persons who after the date of the MDA (and whether or not prior to or after the date of


this Deed) adhere to the MDA.


2 Save where the context otherwise requires, words and expressions defined in the MDA


have the same meanings when used herein.


3 The New Shareholder accepts the appointment in accordance with the provisions of


Section 27.9(c) of the MDA and agrees that this document shall constitute a written


arbitration agreement in the terms set out in Section 27 of the MDA.


4 This Deed and the rights of the parties hereunder shall be construed and interpreted in


accordance with Liberian law and the provisions of the MDA shall apply mutatis mutandis


as if set out herein.


5 For the purposes of Section 28 (Notices) of the MDA, the name and address of the New


Shareholder are as set out below in this Deed:


[Insert notices details]


This Deed of Adherence has been executed as a deed and it has been delivered on


the date stated at the beginning of this Deed of Adherence.





[Insert execution details]


 EXHIBIT 9








PORT LEASE


(including map of leased area in Port)











[To be provided after Effective Date when Port Lease is negotiated and executed.


See Section 6.7(f)]

















'J




































































is


 EXHIBIT 10A





Railroad Corridor to Monrovia Port














200000 2SOOOO Moose 1S00S0 400000


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• «4l


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• •OlW


- pa








JU _asi_ _m»o







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.1 *•4*.





« -<£!*_


TDQQM TJMOO dOO«» liT


-j-


* Tufr


...





- •


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HJh


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nri *14144 1


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n>.. i


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j; -&SU


Ia£_








■ 1j*4


z





-1=- -*a


-- ..


. *. r*. .


 EXHIBIT 10B


MAP OF ROAD CORRIDOR TO MONROVIA PORT


[TO BE PROVIDED]


 EXHIBIT IIA


FORM OF ESCROW RELEASE NOTICE











VALID ESCROW RELEASE NOTICE











Escrtw reference 'Bloom fountain / Eleniito Escrow Account'











Date • f, 2011











We hereby declare that the Mineral Development Agreement ("MDA") relating to the Western


Cluster iron-ore deposits has been executed between the Depositor, the Beneficiary, Sesa Goa


Limited, Western Cluster Limited and the Government of Liberia.








We further declare and confirm that the MDA has been ratified by the National Legislature of the


Republic of Liberia on (•) 2011.


Accordingly, based on the above declaration and under authority granted by the Depositor and the





Beneficiary, I, the Minister of Justice on behalf of the Republic of Liberia hereby instruct the Escrow


Agent to release the Escrow Amount to the Beneficiary and the Government of Liberia in the


amounts and such accounts as are specified below.





Beneficiary Account Details


$76,500,000


Amount;


In writing: United States Dollars Seventy Six Million Five





Beneficiary Hundred Thousand


Eleniito Minerals & Mining LLC


Gty Dover, Kent Country


State: Delaware


Country United States of America


Bank J.P. Morgan Chase Bank


Bank address 125 London Wall, London, tC2Y 5AJ





SWIFT-code CHASGB2L


F I ban 6B94CHAS609242411675S6





Account No. 41167586








Government of Liberia Account Details


 Amount: $13,500,000


In writing; United States Dollars Thirteen Million Five Hundred


Thousand


Beneficiary The Government of Liberia


City Monrovia


Country Liberia


Bank Central Bank of Liberia


Bank address P.O.Box 2048, Carey & Warren Streets, Monrovia,





SWIFT-code Liberia


CBLRLRLM


Account No. 08335-0409-884-34-000


Correspondent Bank Details Credit Suisse, Zurich


SWIFT-code of Correspondent Bank CRESCHZZ80A


For Further Credit To A/c Title: GOL Revenue Account---USD


Account No. 02-205-30000-153





I, the Minister of Justice on behalf of the Republic of Liberia hereby instruct the Escrow Agent to


release the entire Interest accrued on the Sscrow Amount to the Depositor such account as specified


below.





Depositor Account Details





Beneficiary Bloom Fountain Limited


City 5, President John Kennedy Street, Port Louis


Country Mauritius





Bank Standard Chartered Bank (Mauritius) Limited


Bank address Sbene House, 2nd Floor, Left Wing,33, Cybercity,


SWIFT-code Ebene, Mauritius


SCBIMUMUXXX


Iban MUSI SCSI 2301 012011173600 OGOOOO


Account No. 01/201/11736/00 f


Correspondent Bank Details Standard Chartered Bank, New York


SWIFT-code of Correspondent Bank SCeiUS33





PLEASE REFER TO THE RELEASE INSTRUCTIONS UNDER THE DOCUMENT ESCROW AGREEMENT


EXECUTED SIMULTANEOUSLY WITH THE CASH ESCROW AGREEMENT.








Minister of Justice, Republic of Liberia (7J»e Official seal a] the





Republic of Liberia to be


affixed]





Name:


Oate:





























/2)





Copyto: Mr, Gal Chet, Adv


Chet Sand Sapir-Hen lavron, Adv.


Azrieli Center, Square Tower, 24" floor,


Tel-Aviv 6702S, Israel


Mr. P.K. Mukherjee


Sesa Goa Limited


Sesa Ghor, Patto, Panjim,


Goa 403 001, India


 EXHIBIT 1 IB


FORM OF DOCUMENT RELEASE NOTICE





FORMAT VAI.rD RELEASE NOTICE TO RELEASE DOCUMENTS I TO THE


GOVERNMENT OF LIBERIA AND DOCUMENTS 2-5 TO THE DEPOSITOR





J.P. Morgan Chase Bank. N.A., Loudon Branch


Address: 60 Vicioiia Embankment


Loudon, EC4Y OJP





Fax: t 44 (0) 2U 7777 9411


Attention: Escrow Administration








Dear Sirs ---


Western Cluster Share Escrow - Document Escrow Agreement dated I«] July 2011


Ws refer to a custody agreement (the ‘Document Escrow Agreement") dated [•] July 2011


between Bloom Fountain Limited ns Depositor mid Elemlto Minerals <& Mining LLC as


Benellciniy and J P, Morgan Cliase Bank, N A.. London Branch ns Custodian related to die


Western Cluster Share Escrow Account.


Capitalised teuns defined in tins letter have the same meaning giveu. to titan hi the Document


Escrow Agreement.


PLEASE REFER TO THE RELEASE CONDITIONS UNDER THE C ASH ESCROW AGREEMENT


EXECUTED SIMULTANEOUSLY WITH THE DOCUMENT ESCROW AGREEMENT.


We hereby declare that the Mineral Development Agreement ("MDA") relating to the


Western Cluster iron-ore deposits lias bceu executed between the Depositor, the Beneficiary.


Scsa Cioa Limited. Western«. 'luster Limited and die Government ol'Lilieiia. We further


declaie and confirm that (lie MDA has been ratified by the National Legislatuieof tlte


Republic of Liberia oil [•]20l I.


Accoidnigly, based on the above declaration and under authomy granted liy the Depositor


and Beneficiary. I, llie Minister of Justice, on behalf of the Government of Lilieria. hereby


instruct the Custodian:


to tclcasc Document 1 to the Government of Liberia tu tire following address: (a)





Ministiy of Finance. Republic of Liberia Entity Details:


 Broad Street Address:


Monrovia


[•] {to be inserted] Postal Code and City:


Liberia Country:


Hoa Augustine Kpelie Ngaufan Contact Person:


to release Documents 2-5 to the Sesa Goa Limited at the following address: (b)





Sesa Goa Limited Entity Details:





Sesa Gltor, Address:


Patto, Panjim,


Goa 403 001 Postal Code and City:


India Country:


Mr. P.K. Muklierjec Contact Person:





Minister of Justice, Republic of Liberia





[Tlie Official seat of the


Republic of Liberia to be


Name: affixed]


Date:





Mi. Gal Chet. Adv (i) cc:


Chet Saiid Supir-Hen Lavron, Adv.


Azsieli Center. Square Tower, 24,h floor,


Tel-Aviv <57025. Israel





Mr. P K. Muklreijee (ii)





/ Sesa Goa Limited


Sesa Ghor. Patto. Panjim,


Goa 403 001. India


























i


Broad Street Address:


Monrovia


[•] [to be insertetf) PostaJ Code and City.


Liberia Comttiy:


Hun. Augustine Kpelie Nganfuu Contact Person:


to iclciiso Documents 2-5 to the Sesa Goa Limited at the following address. (It)





Sesa Goa Limited Entity Details:


Sesa C/bor, Address:


Patto, panjim.


Goa >103 001 Postal Code and City:


India Crumby.


Mr. P.K. Mukhcrjee Contact Person:








Minister of Justice, Republic of Liberia








[The Official sea! of the


Republic of Liberia to be


Name: affixed]


Date.





Mr. Gai Cher, Adv (j) cc:


Chet Saiid Sapir-Heii Lavion Adv





Aztieli Center. Square Tower, 24lk floor.


Tel-Aviv 67025. Israel


Mr P K. MnkAieijec (iij





Sesa Goa Liuuted t


Sesa Gltov. Patio, Panjun,


Goa d03 001. India












































r





\


□ load Street Address.


Monrovia


[•] [to be inserted} Postal Code and City


Liberia Country:


Hon. Augustine Kpehe Nganfan Contact Person:


to iclciise Documents 2-5 to tile Sesa Goa Limited at the following address (b)


Sosa Goa Limited Entity Details:





ScsaGhov, Address:


Patfo. Panjim.


Goa '103 001 Postal Code amt City:


India Country:


Mr. P.K. Mukherjco Contact Person:








Minisler of Juslice, Republic of Liberia





[The Official sea! of the


Republic of Liberia to be


Name: affixed}


Date:


Mr. Gat Chet. Adv (i) cc:





Chet Sand Sapir-Hen I.avron. Adv.


Azricli Center, Square Tower, 24,h floor,


Te)-Aviv 6702.’’. Israel





Mr P.K. Mukherjee (ii)


Sesa Goa Limited /


Sesa Gbor. Patto, Parijim.


Goa '103 001, India






































1








c


V\





\


 Broad Street Address:


Monrovia


[•] [to be iuserleif] Postal Code arid City:


Liberia Country:


Hon. Augustine Kpetie Ngaufan Contact Person:


to r elease Documents 2-5 to (lie Sesa Goa Limited at the following address: (b)





Sesa Goa Limited Utility Details.


Sesa Glior, Address:





Patto. Pnnjim,


Goa 405 001 Postal Code and City:


Lidia Country:


Mr. P.K. Mukhci'icc Contact Person:





Minister of Justice, Republic of Liberia





[The Official seal of the


Republic of Liberia to be


Name: affixed]


Date





Mr. Gal Orel. Adv (i) cc:


Chet Sand Sapir-Hen Lavron. Adv.


Aziieli Center. Squaic Tower. ?4'h floor,


Tel-Aviv07025, Israel





Mr. P.K. Muklieijee (it)





f Sesa Goa Limited


Sesa Glior. Patto. Panjim,


Goa 403 001. India


 EXHIBIT 11B


FORM OF DOCUMENT RELEASE NOTICE





FORMAT VALID RELEASE NOTIC E TO RELEASE DOCUMENTS I TO THE


GOVERNMENT OF LIBERIA AND DOCUMENTS 2-5 TO THE DEPOSITOR