The contract shall be valid for a period of 6 months for preparation, a period of up to 2 years for completing exploration, and of 10 years for exploitation counted as from the date of execution of the agreement. AKNR has the right to extend the agreement if in compliance with its terms and conditions for additional periods of 5 years, as per the applicable laws. A request in such sense shall be made to the Ministry of Mines at least 1 year before the end of the contract term.
Exploration license for AKNR to explore for gold mineralization in the licensed areas. In case the exploitation of gold in the deposits is economically feasible, an Exploitation license might be issued by the Ministry of Mines.
AKNR will provide, along with the exploration plan, an Environmental Action Plan detailing how it will minimize environmental disturbance and address reparation of damage caused to the environment through its activities. In advance of exploitation, AKNR will provide the results of a detailed Environmental and Social Assessment to be performed at AKNR's sole expense through an approved third party. AKNR will provide an Environmental and Social Management Plan, addressing the environmental impacts noted in the ESIA and their mitigation, the social impacts from the ESIA and proposed mitigation measures, and health and safety of employees. AKNR will observe the Environmental and Social Mitigation Action Plan as agreed by both parties at the commencement of the mining phase.
AKNR is obliged to include in its plans details for its usage of water and for the protection of local community water supplies. AKNR shall spend a minimum of US$ 50,000 during the contract for the enhancement of the environment for the community in the neighboring area of the mine.
KBC is to provide audited financial statements annually in accordance with International Finance Reporting Standards, together with production statistics in reasonable detail. The accounts should be audited by an internally recognized acounting firm acceptable to the Government of Aghanistan.
A financial guarantee in the amount of US$ 100,000 shall be provided by AKNR to the Government of Afghanistan as compensation of, and reparation for, damage to the environment, property rights and any other violations resulting from the activities of AKNR. The amount of the bond (or its residual after all eventual claims are satisfied) will be returned to AKNR at the termination of the contract provided that all outstanding claims for compensation / reparation have been satisfied. Additionally, a surface use fee will be paid annually during the exploration and explotation phases for the operations area and any areas affected by the operations in the amount of US$ 25 per hectare.
Royalties due to the Ministry shall correspond to 26% of the gross revenue from sale of gold at a price set on the date of sale by the London Metals Exchange for each sale of gold, to be paid on a monthly basis
During the first 2 years of the contract AKNR shall spend a minimum amount of US$ 50,000 for the implementation of social programs as per the social development plan.
Afghan nationals shall be employed to the extent practible in all classifications of employment. AKNR shall also develop a training program and facility of suitable capacity for the training of Afghan citizens. There must be equal treatment, facilities and opportunities for all employees (Afghan and non-Afghan) in the same job classification, regardless of nationality.
AKNR may procure its equipment and machinery within Afghanistan or outside the country, but shall use its best efforts (along with its subcontractors) to purchase goods and services in Afghanistan if available in suitable and reasonably comparable quality and delivery time, and at comparable prices.
AKNR shall perform at its sole expense all necessary construction during the term of the agreement, including infrastructure such as roads, clinics, parks, buildings and water resources. All imovable property existing at the time of termination of the agreement will become the property of the government of Afghanistan without compensation.
AKNR is obliged to provide a detailed investment plan to the Ministry of Mines for the exploration phase of the mine, which meets the terms of its bid proposal. A Feasibility Study shall also be submitted, along with an investment plan, for the mining phase of the contract.
Any dispute or controversy not solved by mutual agreement within 60 days shall be settled by arbitration initiated by either party by submission to the International Court of Arbitration as the independent arbitrator.
Any future changes to existing Mineral Laws will have no bearing on the terms, conditions or validity of the agreement, unless incorporated within a jointly agreed addendum. AKRN agrees to observe any changes to Mineral Laws and ministerial procedures that are designed to improve health and safety.