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REPUBLIC OF LIBERIA)


MONTSERRADO COUNTY)


























MINERAL EXPLORATION AGREEMENT


BETWEEN





THE REPUBLIC OF LIBERIA





AND








GOLDEN VENTURES INC.


 THIS MINERAL EXPLORATION AGREEMENT is entered into by and


between the REPUBLIC OF LIBERIA, through its Government represented


by the Deputy Minister for Operations of the Ministry of lands Mines A


Energy (hereinafter referred to as the "Govommont*')





AND


GOLDEN VENTURES INC., a corporation existing and doing busmoss under


the laws of Liberia represented by Lhii Lindslrom its Chief t xecutive Officer


(hereinafter referred to as the "Operator"), hereby








WITNESSETH:


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


vested in the Republic of Liberia (the Republic) and all rights related to the


exploration for and exploitation of such minerals pertain exclusively to the


Republic; and


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


Lands, Mines & Energy is by law charged with the responsibility of


administering the mineral laws of tho Republic and in that process to ensurt


the efficient development of the mining industry; and


WHEREAS, the Operator has successfully completed a program of


reconnaissance work of the selected areas. .md


WHEREAS, the Government is determined to accelerate the development of


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


Development of mmerab which may exist in exploration areas for the


economic and sooal benefit of Ubena and recognizes that a large capital


expenditure is necessary to ensure that such minerals are economically and


efficiently developed, and


WHEREAS. Government agrees to grant the Operator such m«eral rights


and privileges in consideration of the undertaking by the Operator to moke


annual payments, and to pay rents, royalties and other fees hereinafter


prescnbed and to perform and observe the terms and conditions of this


agreement:





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


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


conditions herein contained, the Parties hereto mutually agree as follows


 1.0 DEFINITIONS





Unless the context shall otherwise clearly indicate, the following terms


wherever used in this Agreement shall have the respective meanings


Bet forth below:





1.1 Affiliate: Means a Person mat controls, is controlled by or is under


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


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


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


1.2 Associated Minerals: The term "Associated Minerals" means any


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


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


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


Deposit or Deposits


1.3 Centre: the term ‘Centre’ means the International Centre for Settlement


of Investment Disputes established under the auspices of the


International Bank for Reconstruction and Development





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


Settlement of Investment Disputes between States and Nationals of


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


America on March 18, 1965


1.5 Effective Date The term "Effective Date" means the date, provided rt


Section 26. on which this Agreement shal become effective.


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


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


but only dunng the Exploration Period


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


described in Section 2 1


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


predominate economic value, as determined by the result of exploratory


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


character as to permit the economic production thereof


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


divisions, instrumentalities and agencies of the Government of the


Republic of Liberia


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


types


(a) Immovable transportation and communication facilities (including


roads bridges, railroads, an ports, landing strips and landing pads


for aircraft hangars and other airport facilities garages channels


tramways pipelines and radio. telephone. telegraph,


telecommunications, and electronic or other forms of


communications facilities*;


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


breakwaters, terminal facilities and warehouses, and loading and


unloading facilities);


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


generating plants and transmission lines. dams, water drains, water


supply systems and Systems for disposing of tarimgs. plant waste


(d) Immovable public welfare facilities (including schools, hospitals and


public halls);


(e) Miscellaneous immovable facilities used primarily m connection wirn


the operation of other facilities (including offices, machine shops


foundries, repair shops and warehouses); and.


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


part of the immovable facilities described in paragraphs (a) through


(e).


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


the exploration, mining and management operations of GOLDEN


VENTURES INC.


1.12 Operator The term "Operator means GOLDEN VENTURES INC


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


following assets (oilier than infrastructure) used for Operations and


Activities:


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


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


explore for or produce Gold and/or Associated Minerals:


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


connection with the operation of the foregoing (including offices


machine shops, foundries, repair shops and warehouses);








4


(c) Movable and immovable facilities and equipment for the


maintenance of personnel (including dwellings, stores mess halls


and recreational facilities): and


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


infrastructure.


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


Minerals or any other mineral deposit shall include dnll, develop, extract,


strip, mine, sluice, dredge, process (including benefiaate. concentrate or


otherwise treat), stockpile, transport, load, sell and export, for the


account of the operator


1.15 Production The term “Production" as used in reference to Gold,


Associated Minerals or any other minerals, shall mean the commercial


exploitation of Minerals found in the Exploration Area and all activities in


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


Installation, fabrication, operation, maintenance, drilling, development,


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


beneficiation, concentration or other treatment), stockpiling,


transportation, loading, sale and exportation by the Operator








2.0 TERM OF THE AGREEMENT


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


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


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


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


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


agree








3.0 EXPLORATION RIGHTS:


3.1 Grant of Exploration Rights: On the terms and conditions hereir


provided the Government hereby grants to the operator, during the


period hereinafter defined, commencing with the Effective Date plus


any extension of such period to which the Government may agree


(referred to herein as the "Exploration Penod") the exclusive right to


explore for Gold. Diamonds. Associated Minerals and any other


mineral deposit (except ron ore) in the Exploration Area


 3.2 Exploration Area





(a) The Exploration areas shall lie in Putu Area. Grand Godoh


County, as identified on the attached map. with motes and


bounds or coordinates attached hereto as Appendix "A"


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


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


Effective Date.


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


cease to exist


3.3 Surrondor of Exploration Area: Unless the Minister and the Operator


otherwise agree


(a) At or before tho end of the initial term of the Exploration Period


the Operator shall surrender a minimum of fifty percent (50%) of


Ihe Original exploration area.


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


Operator shall surrender the remainder of the Exploration Area


and. upon such surrender, the Exploration License shall


automatically terminate.


(c) Notwithstanding paragraphs 3 3 (b) above, if the Operator wishes


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


the exploration period. * shall have the right to do so by applying


for a mineral development agreement over the area


3.4 Minimum Expenditures


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


the Operator shall diligently and wtthout interruption explore for


gold, associated minerals and any other mineral deposit within the


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


accordance with the provisions of this section, then this


Agreement shall be liable to cancellation


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


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


calendar year as Exploration Costs, the latter being defined to


compose al of the Operator's managerial and corporate costs


related to exploration


 4.0 Pilot Mining Rights





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


nght to produce gold, associated minerals and any other mineral under


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


Energy.





5.0 Mineral Development Agreement


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


apply for a Mineral Development Agreement This agreement shall be


concluded in accordance with the Minerals and Mining Laws and


Regulations of Liberia








6.0 INCIDENTAL RIGHTS


6.1 Grant of Rights Subject to the terms and conditions herein provided,


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


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


Government hereby grants to the Operator the right within the


Exploration Areas:


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


Equipment and other facilities, and to maintain and operate the


same


(b) To remove, extract and use solely for its own exploration


purpose, free of tax or other cnarge or fee imposed by the


Government, any water, gravel, sand, clay, stone and timber


(except protected fauna and flora); provided however, that where


any land, villages, houses, person, or watering places for animals


have been supplied water by nght through custom, the Operator


shall not deprive them of a constant and reasonably supply of


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


consent, interfere with any water or other rights enjoyed by


anyone under any agreement with the Government


6.2 Reservation of Rights The Government reserves the nght. on


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


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


other lines of communication within the Exploration Area


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


within the Exploration Area is reasonably required for the conduct of


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


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


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


unreasonably denied, to exercise its right of eminent domain with


respect to such property The Operator shall reenburse the


Government for any compensation paid or payable to the private owner


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








7.0 INFRASTRUCTURE


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


undertake the construction, installation and improvement of all or any


part of the infrastructure. All such Infrastructure shall be maintained


and operated by the Operator in a reasonably good manner


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


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


development of the Operation and Activities








8.0 CONDUCT OF OPERATIONS


8.1 Best Exploration Practices The Operator sha« conduct aB of its


operations hereunder using appropriate modem and effective Plant


and Equipment. Infrastructure, materials and methods Such


operations shaB be conducted in a proper and workmanlike manner


with due diligence, efficiency and economy, m accordance with the


laws of Liberia and with the best mining and engineering practices


used by efficient operators m similar operations, elsewhere m the


world








8.2 Maximum Economic Operation


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


associated minerals from each Pilot Mining Area and at the


maximum capacity of each Production Area consistent with the


optimum economic development of all Production Areas


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


minerals, to the neglect of lower grades




















8


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


Associated Minerals produced at the maximum prices possible in


the light of the prevailing international market prices and


conditions, and in accordance with good competitive business


practices generally accepted at the time The Operator hereby


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


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


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


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


proportion of the Gold, and/or Associated Minerals produced


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


conditions as the parties may agree





9.0 HEALTH AND SAFETY





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


devices and shall practice modem health and safety procedures and


precautions (including, regular safety training instruction for its


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


engineering practices, and acceptable labor safety standard In this


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


regulations and Laws of the Government








10.0 EMPLOYMENT. TRAINING AND SECONDMENT


10.1 Employment of Liboriana: The Operator shall not employ foreign





unskilled labor. To the maximum extent feasible, the Operator shai


employ Liberian citizens at all levels


10.2 Training of Liberians The Operator shall provide on a continuing


basis for the training of its Liberian employees, in order to qualify them


for skilled, technical administrative and managerial positions


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





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


expense of the Operator





11.0 CONSERVATION








11.1 The Operator shall encourage economic and social development


during the term of his operation and shall provide for meetings on a


regular basin between representatives of the Operator and the local


communities for the purposes of considering and making


recommend a I ions to the Operator and to the Government with respect


to manors of community interest, such that it shall not hinder the


Operator's work.


9


11.2 Natural Resources: The Operator shall take preventive, corrective


and/or restorative measures to ensure that all streams and water


bodies within or bordering Liberia, all dry land surfaces, and the


atmosphere bo protected from pollution, contamination or damage


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


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


water bodies, land surfaces, and atmosphere resulting from operations


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


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


socially desirable.








12.0 ADEQUATE CAPITAL AND STOCK OWNERSHIP


The Operator shall provide all capital necessary for the economic and


profitable exploration for Gold and Associated Minerals and the


production of those Minerals under this Agreement. In this connection,


the Operator shall at all times maintain a reasonable and prudent


capital sliucture.








13.0 TAXATION


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


excises, and other charges imposed by Liberian Laws of general


application, except as may be otherwise provided by other laws and


administrative regulations granting exemptions from customs duties


and excise taxes.


13.2 INCOME TAX The Operator shall be subject to Ubenan Income Tax


Law of General Application, except that notwithstanding any provisions


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


Operator shall be thirty percent (30%).








14.0 ROYALTIES


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


of all gold discovered during exploration and produced under pilot


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


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


within thirty days of export.




















10


14.2 Associated Minerals and other Mineral Deposits The Operator


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


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


produced hereunder and shipped or otherwise disposed of by the


Operator The amount of said royalty shall be negotiated and agreed


upon by the parties


15.0 Exploration Fees and SURFACE RENTAL








15.1 The Operator shall make an annual payment of Five Thousand


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


Exploration License


15.2 The Operator shall make annual lump sum rental payments of


US$25,000.00 to the Government for all unsurrendered portions of the


Exploration Area in the first two years and Eighteen US Cents (US$0.18) per


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


States Dollars (US$3.00) per acre for aN areas operated under pilot mining


15.3 The first payment for the exploration license fee and surface


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


the parties. Subsequent payments shall be made withai thety (30) days after


each subsequent anniversary of the Effective Dote


15.0 RECORDS. REPORTS. AND INSPECTION


16.1 Availability of Records The Operator shall maintain at its


pnnopal office in Ubena. or at such other office as the Government


may approve


(a) Copies of aN maps, geological, rrwsng. or other earth science


reports and mineral analysis (together w«h al field data which


supports such reports or data) production records marketing


report and any other data obtained or compded by the Operator


as a result rrarang Operations and Actrvibee AN information, data


and material specified in this paragraph shafl be m a form


be The Operator shal have theP*rkjhMDBtemporan»y remove


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


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


and evaluation

















11


(b) The Operator shall Keep the Government fully informed of all


Operations and Activities, wherever conducted, and of its plans in


respect thereof. The Government shall hnve the right to monitor


exploration and pilot mining operations and Activities from time to


time and a reasonable number of Government personnel may.


upon prior notice to the Operator, at reasonable times and subject


to compliance with the Operator’s security requirements, attend


and inspect Mining Operations and Activities conducted in Liberia


(C) Within thirty (30) days after the ena of each calendar quarter, me


Operator shall provide the Government with a report on an


Operations and Activities for that calendar quarter including


Minerals recovered and sotd. Within ninety (90) days after the end


of each Financial Year, the Operator shall furnish the Government


with a report on all Mmmg Operations for that Financial Year


including Minerals recovered and sold


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


such form, in such detail, and at such tune, as may be required by law


or as the Government may otherwise require with respect to


exploration, production, employment and training, marketing and such


other matters as may be related to the conduct of operations


hereunder





16.4 inspection 1 he Government may. upon reasonable notification to the


Operator, inspect the books and records of the Operator, and any all


facilities and area related to the Operator’s operation as provided


hereunder. The Operator shall make its appropriate employee available


to render assistance with respect to any such inspection.


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


Information supplied by the Operator hereunder as confidential and


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


written consent of the Operator, which consent shall not be


unreasonably withheld


Financial information about the Operator shall however be treated as


confidential for a period of one (1) year, commencing as of the date of


submission of such information. The Government may nevertheless


use any such Information received from the Operator for the purpose of


preparing and publishing general records or statistics on natural


resources or other conditions in Utoena. and in connection with any


dispute between the Government and the Operator.


17.0 NON-ASSIGNABILITY





This Agreement and any interest therein may not be transferred or


assigned, or mortgaged, pledged or otherwise encumbered, in whole or


in part, without the Government’s prior written approval unless to an


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


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


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








18.0 FORCE MAJEURE


18.1 Except as provided in this Section, failure on the part of the Operator to


comply with any of the conditions hereof (except the obligation to make


payment of monies to the Government) shall not bo grounds for


cancellation or give tho Government any claim for damages insofar as


such failure arises from force rnajeure, if the Operator has taken all


appropriate precautions, due care and reasonable alternative


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


its obligations hereunder.


The Operator shall take all reasonable measures to cure such failure


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


The Operator shall notify the Government within fourteen (14) days of


an event of force rnajeure affecting its ability to fulfill the terms and


conditions hereof or any event, which may endanger the natural


resources of Liberia and similarly notify the Government of efforts


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


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


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


any other extraordinary event which the Operator could not reasonably


be expected to prevent or control, but shall not include any event


caused by a failure to observe the best mining and engineering


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


or contractors. If; as a consequence of force rnajeure. operations


hereunder remain in substantially total suspension for an uninterrupted


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


Agreement shall be extended by the time of such suspensions
































n


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


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


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


hindered, prevented or delayed by force majeure. as well as any other


time periods and dates set forth in this Agreement, shall be extended


by the period of delay, but not longer than the continuance thereof and


such additional period as may be reasonable in the circumstances, and


the Operator shall not be liable in damages or otherwise to the other


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


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


obligation.


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


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


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


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


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


similar ("Industrial Dispute").








19.0 SURRENDER OF OPERATOR S RIGHT


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


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


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


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


except those obligations that may have accrued prior to the Effective


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





20.0 SECTION 24: FINANCIAL REPORTING AND CURRENCY


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


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


incurred or transactions carried out. in currency that is legal tender in


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


converted to Dollars in accordance with and pursuant to generally


accepted accounting principles in the United Kingdom. Canada or


internationally accepted (except to the extent inconsistent with the


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


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


applicable transaction.




















I-I


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


without restriction, directly or indirectly, of the Government, to oDtain.


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


places as it chooses. Without prejudice to the generality of the


foregoing, the Operator shall have the unrestricted and unencumbered


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


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


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


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


Notwithstanding the foregoing, the Operator shall maintain at least one


bank account with a bank or financial institution iri the Republic. The


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


Person currency that is legal tender in the Republic at the Prevailing


Market Rate of Exchange. Additionally, any and all transactions


between the Government and the Operator dealing with or referring to


currency that is legal tender iri the Republic will be converted to Dollars


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


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


be determined by reference to the Prevailing Market Rate of Exchange


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


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


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


otherwise agree. Any obligation originally stated in currency that -


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


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


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


However, the Operator 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 the employees of the Operator, and any


other sums payable to other Persons from which a portion is requ»reo


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


Government in the currency in which such salaries or wages or such


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


other payments whether to the Government or to other Persons in


currency that is legal tender in the Republic


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


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


principal and other property payable items arising from as a result of.


or related to Operations, and to do so free of Taxes and Duties on such


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


partial surrender, exchange or confiscation of such Dollars or other


direct or indirect restrictions on such remittances or receipts

















13


24.5 Audit





a. The Operator shall cause its books of accounts to be audited


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


Minister may approve, aftor the dose of each Financial or Fiscal


Year by an internationally recognized independent auditor


selected by the Operator and satisfactory to the Government and


a copy of the annual financial statement duly certified by said


auditor shall be furnished to the Government within twenty (20)


days after its receipt by tho Operator. The foregoing shall not. in


any way. imply acceptance of any such audit or certification by the


Government, or predude the Government from auditing such


books of accounts but at the Government s expense.


b The foregoing shall not any way imply acceptance of any such


audit or certification by the Government or predude the


Government from auditing such books of accounts at its own


expense and as provided under Law. provided that the


Government shall provide the Operator with a copy of any such


audit withm forty five (45) days of race**. However, once either


the Government or the Operator has audited any book of


accounts, the financial statemont thus audited shall oe considered


acceptable and the audit results binding and condusive as to its


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


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


statement.


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





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


Revenue and Finance Law, assess interest and penalties but not


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


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


multiplied by the amount underpaid If LIBOR should cease to be


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


substitute rate. If the Operator has overpaid its liability for Taxes


and Duties then, at its option, it may elect either to be reimbursed


by the Government or to apply such overpayment against future


Taxes and Duties.


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





required, the Operator will cooperate to provide the Government


with copies of the information, books and records needed to


complete the audit If the Government nonetheless deems it


nocessary for any pari of such audit to be performed outside ol


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


Government











ir,


 SECTION 25: INCIDENTAL RIGHTS





25.1 Grant of Right* Subject to the terms and condition* herein provided


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


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


Government hereby grants to the Operator the right, withm the


Exploration Areas


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





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


same


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





purpose, free of tax or other charge or foe imposed by the


Government, any water, gravel, sand. clay, stone and timber


(except for protected species, insofar as they do not interfere with


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


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


been supplied water by nght through custom, the Operator shall


not deprive them of a constant and reasonably supply of usable


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


interfere with any water or other rights enjoyed by anyone under


any agreement with the Government The Government will


provide information to the Operator of any such agreements


affecbng the Exploration Area upon the Operator * request





25.2 Import*. The Operator shal be enoded to xnport and uae m respect o>


Operations and subsequently export, any and afl machmery


equipment, consumable items, fuels, explosives and any other thing


whatsoever reasonably required with respect to Operations and in


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


the Operator shall not re-export fuels and explosives surplus to


requifemenis if such surplus can be sold at competitive uitemutionu:


prices withm the Republic The Operator shall at all time comply with


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


25.3 Taxes on Reeale. The Operator may sei. m the Republic al imported


items that are no longer needed for Operations However if such


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


all formalities required m connection with the payment by the purchase*


of al Taxes and Duties on the depreciated value of the mports


imposed on such sales by Law























17


SECTION 26: ASSIGNMENT AND ENCUMBRANCE





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


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


the prior written consent of the Government (which consent shall not be


unreasonably withheld) provided, however, that such consent shall not


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


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


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


Affiliate


26.2 Right to Encumber. The Operator shall have the right to mortgage,


charge or otherwise encumber all or part of its interest under this


Agreement for the purpose of raising, from one or more Affiliates or


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


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


encumbrance shall only be exercised with the prior written consent of


the Minister, which consent shall not be unreasonably withheld


26.3 Notico of Assignment or Encumbrance. The Operator shall


promptly give Notice to the Minister of any assignment, mortgage,


charge or other disposition or encumbrance pursuant to this Section


26








SECTION 27: TERMINATION


27.1 Termination by the Operator. During the Exploration Period, the


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


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


Exploration Area, and the Operator shall be relieved of all obligations m


respect of area so surrendered except those obligations that may have


accrued prior to the Effective Date of or arising out of or related to the


surrender


27.2 Termination by the Govemmont Subject to the provisions of


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


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


Default") shall occur and be continuing


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


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


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


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


said notice).











IX


 b) where the Operator shall materially fail to comply with its


obligations or any other conditions under this Agreement and such


failure shall have a materially adverse effect on the Government


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


Government or within such period as may be specified in said


notice;





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


up its affairs, or make an assignment of all or substantially all of 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 tnbunal for the


appointment of 3 trustee or receiver for all or any substantial part


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


bankruptcy, reorganization. arrangement, insolvency or


readjustment of debt under the laws of any jurisdiction, whether


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


filed, or any such proceedings are commenced against it. shall


indicate its approval thereof, consent thereto or acquiescence


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


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


approving the petition in any such proceedings, and provided that


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


order removed or lifted within sixty (60) days .


d where the Operator shal fail to cany out Exploration as required





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


consecutive months or cease Production with respect to all


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


months unless such failure or cessation is consented to by the


Government or is caused by a state of force majeure in particular


relating to security issues preventing safe access 10 the


Exploration or Production Areas.





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


is tr i in Section 27 2. the Government, before taking any further


iH provide Notice to the Operator of the alleged occurrence of


it of Default and of the Government s views m tnat regard


offer the Operator a fair opportunity to consult with the


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


ation, the Government is of the reasonable opinion that the


not be resolved by further consultation, the Government may


to the Operator Notice of the Government s intention to


this Agreement. If the Event of Default is not cured within


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


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


then this Agreement shall be terminated








IV


 27.4 Disputes Regarding Events of Default Notwithstanding the


provisions of Sections 27 2 and 27.3. if the Operator disputes whether


there has been an Event of Default described in Section 27.2 and.


within sixty (60) days after receipt by the Operator of the Government’s


Notice of its intention to terminate, refers such dispute to arbitration in


accordance with Section 29. then termination of this Agreement snail


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


award upholding the Government s right to terminate








SECTION 29: ARBITRATION


29.1 Submission to Arbitration. Any dispute between the Government


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


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


termination, enforceability or breach of this Agreement (including any


dispute concerning whether the Government or the Operator has


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


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


which resolution by submission to an expert is not specifically provided


elsewhere in this Agreement shall be exclusively and finally settled by


binding arbitration pursuant to the Convention in accordance with the


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


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


Parties agree that this Agreement and the Operator’s Operations


pursuant thereto constitute an "investment” by reason of the


expenditure of a considerable amount of money in the Republic and


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


to this Section 29 is u legal dispute arising directly out of an


investment. Either of the Parties to such dispute may institute


arbitration proceedings by giving Notice to the other Party and Notice


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


the issues in dispute.


29.2 Nationality for Purposos of Arbitration. The Operator is


incorporated in Liberia and notwithstanding the incorporation in the


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


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


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


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


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


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


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

















20


29.3 Arbitrators. Any arbitral tribunal constituted pursuant to this


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


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


(1) arbitrator, who shall be the president of the tnbunal and shall be a


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


any other state of which a Party is a national under Section 29.2), to be


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


shall have an interest in the matters in dispute.


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


arbitration under this Agreement shall instead be referred for resolution


to a single referee to be appointed by the Secretary-General of the


Centre, or of any successor entity as provided for by Section 29.10


below, except for any dispute arising out of or related to Sections 3, 4.


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


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


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


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


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


referee shall be rendered pursuant to Section 29.6 of this Agreement


(except as regards the requirement for a decision by majority vote) and


shall be final and binding unless appealed by any Party to arbitrators


appointed as provided in this Section 29.3, who shall examine the


referee's decision only as to manifest error of law, findings of fact that


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


misconduct or other unauthorized act by the referee


29.5 Venue. Arbitration proceedings conducted pursuant to this Agreement


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


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


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


arbitral tribunal shall decide. Any procedural issues that cannot be


determined under the arbitral rules of the Centre shall be determined


pursuant to applicable iaw as set forth in Section 33 below


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


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


after any hearing conducted has been concluded. Any monetary


award shall be assessed and payable in Dollars (determined at the


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


award involved an obligation expressed in any currency other than


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


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


imposed by Government Each Party shall bear its own costs arid


attorney fees.


Neither Party shall have any liability tor either consequential damages


(except for purposes of set off) or exemplary or punitive damages, but


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


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


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


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


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


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


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


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


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


may. in Its discretion, specify a reasonable period of grace to cure any


defect or default on the pari of the Operator, provided that such period


of grace shall not exceed one hundred eighty (180) days for Ihe making


of any payment required by such award.


29.7 Waiver of Sovereign Immunity. The Government hereby irrevocably


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


the enforcement of any arbitral award rendered by a tribunal


constituted pursuant to this Agreement including immunity from service


of process and immunity from the jurisdiction of any court situated in


any state, country or nation


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


arbitration hereunder shall not be affected by the fact that a davnant or


respondent has received full or partial compensation from another


Person for a loss or injury that is the object of the claim or dispute, and


any such other Person may participate in such proceedings by right of


subrogation.


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


arbitral tribunal constituted pursuant to this Agreement may contain


such orders (including orders for specific performance, other equitable


relief or monetary damages) in respect of or affecting any of the Parties


(and any loss or damage suffered by any of them) as such arbitral


tnbunal determines to be appropriate in the circumstances. The


Parties, subject to their respective obligations contained elsewhere in


this Agreement, shall take ull such actions as are necessary to give full


and complete effect to the award which, in accordance with its terms


shall be binding upon and enforceable against them





























22


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


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


interest to either Party to this Agreement Should the Centre be


replaced by. or its functions be substantially conferred upon or be


transferred to, any new international body of a similar type and


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


such body for settlement by arbitration in accordance with the


foregoing provisions of this Section 29.





23.0 NOTICES


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


or other communications (collectively referred to herein as


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


Agreement shall be In writing. All communications shall be


delivered, in case of the Government to:


The Minister of Lands, Minos & Enorgy


Ministry of Lands, Minos & Energy


P.O. Box 10-9024


1000 Monrovia 10. Liberia


And in the case of the Operator to


Tho President


GOLDEN VENTURES INC.


Monrovia, Liberia


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


Operator.


A delivery of a communication shall be deemed effective only


when mailed, postage prepaid and return receipt requested,


telefaxed; or, hand-delivered and receipt.


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


from filing any report, return or other communication required by


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


therein prescribed.


 24.0 NON-WAIVER





The failure of either party at any time to requite performance by the


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


of that party thereafter to enforce the same, or shall it effect the party’s


right to enforce any of the other provisions of this Agreement nor Khali


the waiver by either party of the breach of any provisions hereof be


taken or held to be a waiver of any subsequent breach of such


provision or as a wavier of the provision itself


25.0 AFFIRMATIONS


25.1 The Operator shall, during the term of this Agreement and for such


period thereafter as may be reasonable, continue to have corporate


existence as well as all corporate rights, powers, purposes and duties


set forth and described in this Agreement, and in its Articles of


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


amended in accordance with their terms


25.2 The ownership of any Mineral shall pass from the Government to the


Operator at the time that the Mineral in the Exploration Area is


excavated by the Operator.


25.3 Subject to the obligations of the Operator and the Government


elsewhere contained in this Agreement, the Operator shall ensure that


it complies with the Agreement


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


nghts granted to it under this Agreement No other person shall have


any rights under this Agreement unless a Party or unless otherwise


specifically provided m this Agreement


25.5 Each Party shall execute such documents and do such further things


as may be necessary to give full and complete effect to the provisions


of this Agreement








26.0 EFFECTIVE OATE m* Agreement shall become ettective ana oe


binding on the Parties when executed by them


























24


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


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


indicated below.


Signed in_originals on the ■^fr^davof ClTO***-AD 2005.














IN PRESENCE OF FOR THE GOVERNMENT OF THE


RPPIIRI IC. OFLIBERIA:














DEPUTY MINISTER FOR O


MINISTRY OF LANDS, MIN


ENERGY














FOR THE OPERATOR:




















GOLDEN VENTURES INC.
























































25


 Mineral and Exploration Area for Golden Ventures Inc., Putu











560000 570000 503000 603003 620000 63GOOO











H


• 1











 UTM Coordinates of the Mineral and Exploration Area for Golden


Ventures Inc., Putu








Point Easting Northing


0 600000 650000


1 620000 650000


2 620000 610000


3 600000 610000


4 500000 625000


5 590000 625000


6 590000 610000


7 570000 610000


8 570000 625000


9 580000 625000


10 i 580000 63500C


11 585000 635000


12 585000 640000


13 600000 640000


0 600000 650000





Area=1375 Sq Km