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DATED 4th MAY, 2015
THE REPUBLIC OF GHANA
and
NEWMONT GOLDEN RIDGE LIMITED
REVISED INVESTMENT AGREEMENT
TABLE OF CONTENTS
Clause Page
1. Definitions and Interpretation........................................................................................1
2. Effective Date................................................................................................................5
3. Term of the Agreement..................................................................................................6
4.. Stabilisation....................................................................................................................6
5. Taxes and Duties............................................................................................................8
6. Government Carried Interest........................................................................................12
7. Financial Reporting, Currency and Adequate Capital.................................................14
8. Adequate Capital..........................................................................................................16
9. ' Affiliated Company Transactions................................................................................16
10. Miscellaneous Provisions.............................................................................................17
11. Periodic Review...........................................................................................................17
12. Employment and Training...........................................................................................18
13. Use of Ghanaian Goods and Services..........................................................................19
14. Incidental Rights..........................................................................................................19
15. Undertakings of the Government.................................................................................19
16. Conduct of Operations.................................................................................................22
17. Land and Facilities.......................................................................................................22
18. Health and Safety.........................................................................................................24
19. Confidentiality.............................................................................................................24
20. Indemnification............................................................................................................25
21. Encumbrance................................................................................................................25
22. Termination..................................................................................................................25
23. Disposition of Assets...................................................................................................27
24. Arbitration....................................................................................................................27
25. Notices.........................................................................................................................30
26. Force Majeure..............................................................................................................32
27. Entire Agreement - Modifications...............................................................................33
28. Assignment and Succession.........................................................................................33
29. Survival Provision........................................................................................................33
30. Non-Waiver of Rights..................................................................................................33
31. Severability..................................................................................................................33
Appendix A - Akyem Mining Lease
--Appendix B - CalcuIatiumsfRoyalty ---
Appendix C - Calculations of Guaranteed Payments to Government
Appendix D - Mining List
Appendix E - Current VAT MOU
THIS AGREEMENT is dated 4,h May, 2015 and made
BETWEEN:
(1) THE REPUBLIC OF GHANA, represented by the Minister of Lands and Natural
Resources and die Minister of Finance and Economic Planning (hereinafter referred to
as the “Government”)* and
(2) NEWMONT GOLDEN RIDGE LIMITED, a company with limited liability
established under the laws of Ghana (hereinafter referred to as “Golden Ridge”).
BACKGROUND:
(A) On December 18th, 2003, the Government and Golden Ridge entered into an
Investment Agreement (die “2003 Investment Agreement”) under which the
Government granted Golden Ridge certain financial and other concessions, warranties
and conditions in order to encourage investment by Golden Ridge in Ghana.
(B) Golden Ridge has made significant investment in a gold mining project in the Eastern
region of Ghana following execution of die 2003 Investment Agreement.
(C) The Government has proposed changes to certain terms of the 2003 Investment
Agreement in light of the changes in conditions in Ghana that have occurred since
2003 and in keeping with other objectives and policies that the Government wishes to
see realised with respect to the mining industry in Ghana.
(D) Golden Ridge, in a spirit of cooperation and in order to address concerns of each
Party, has agreed to revise the terms of the 2003 Investment Agreement as regards the
rights of Golden Ridge under that agreement.
THE PARTIES AGREE AS FOLLOWS each in consideration of the agreement of the
others:
1. DEFINITIONS AND INTERPRETATION
LI The following terms wherever used in this Agreement shall have the respective
meanings set forth below:
_ “2003 Investment Agreement” means the agreement between die Government and
NGGL, Rank Mining Company Limited (which has since been merged'inttrNGGL)
and Golden Ridge Resources Limited (now called Newmont Golden Ridge Limited)
that was ratified by Parliament and became effective on December 18th 2003 and that,
as regards Golden Ridge has been revised and replaced by this Agreement.
“Additional Areas” Has the meaning set forth in'Section 15.10 below:------
“Affiliate” means a legal Person that, with respect to Golden Ridge, directly or
indirectly controls, is controlled by, or is under common control with Golden Ridge.
For purposes of this section, “control” means the possession, directly or indirectly, by
one legal Person of more than fifty percent (50%) of the equity of or voting power in
. -another legal Person. •
1
“Agreement” means this Revised Investment Agreement and includes those
provisions of the Akyem Mining Lease that are not inconsistent or in conflict with this
Revised Investment Agreement.
“Ahafo Revised Investment Agreement” means the investment agreement to be
entered into on or about the date of this Agreement between the Government and
Newmont Ghana Gold Limited which pursuant to Section 2.1 below must become
effective as a condition of this Agreement becoming effective.
\ “Akyem Mining Lease” means the two Mining Leases entered into between the
Government and Golden Ridge each dated 19 January 2010 which are pending
ratification by Parliament.
“Basic Stability Period” has the meaning given in Section 4.1.
“Centre” means The International Centre for Settlement of Investment Disputes
established under the auspices of the International Bank for Reconstruction and
Development.
“Contract Area” means all Production Areas.
“Convention” means the Convention on the Settlement of Investment Disputes
between States and Nationals of Other States opened for signature at Washington,
D.C., United States of America, on March 18,1965.
‘Development” means all preparation for the removal and recovery of Minerals,
including the construction or Installation of a mill, a Mining Plant or any other
Infrastructure to be used for the mining handling, milling beneficiation or other
U ! processing of Minerals.
“Dollar** and “US$” mean United States dollars and any other currency that is legal
tender in the United States of America.
‘Effective Date” means the date described in Section 2.
I “Equity Capital” means stockholders* equity as reflected on the balance sheet of
Golden Ridge, the balance sheet having been prepared in accordance with IFRS.
“Events of Default” has the meaning given to such term in Section 22.2._
r
“Exploration” means activities directed towards ascertaining the existence, location,
quantity, quality or commercial value of deposits of Minerals.
“Extended Stability Period” has the meaning given in Section 43.
“Extension Plan” has the meaning given to it in Section 43(a).
“Financial Year” means January 1 through December 31, or such other period as the
Parties may agree.
( v ( “Foreign Currency” means Dollars and any other currency except Ghana Cedis.
“Ghana Cedi” means the lawful currency of Ghana and any currency that is legal
tender in Ghana.
“Government” means the Republic of Ghana, its government, and any political
subdivision, region, branch, division, instrumentality, authority and agency thereof.
“IFRS” means International Financial Repotting Standards issued or adopted by the
International Accounting Standards Board and consistently applied.
“Indebtedness” means indebtedness for money borrowed from an Affiliate.
“Infrastructure” includes the following:
(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 radio,
telephone, telegraph, telecommunications; and electronic or other forms of
communications facilities);
(b) immovable port facilities (including docks, harbours, 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 and warehouses);
(f) other immovable facilities used primarily in connection with or as an incident
to Operations; and
(g) movable facilities and equipment used as an integral part of the immovable
facilities described above. For purposes of this Agreement, immovable items
consist of alltangible items that are securelyaftixed and attache d "toThe" land “
or to buildings or other structures on the land. All other items arc movable
items.
“International Standards” means generally accepted world mining industry
- standards-and-procedures, due-aHowanee being mado-for-any-special circumstances-in- • • ------
Ghana.
“Law" means any constitution, law, statute, decree, rule, regulation, judicial act or
decision, judgment, order, proclamation, directive, executive order or other sovereign
act of the Government that regulates, controls or relates to Golden Ridge and to its
Operations, or that is generally applicable in Ghana.
3
1
“London Bullion Market Association Gold Fix" and “London PM Fix" have the
meaning given in Section 5.2(f)(ii)(A).
“Mineral” means any naturally occurring, inorganic ores with a defined,
characteristic chemical composition and physical properties that has economic value,
but excluding oil, gas, coal and geothermal resources.
“Mining Lease” means a right and license granted by the Government to mine and
produce Minerals in a specified area in Ghana.
“Mining Plant” means any machinery, equipment, vehicle, tool, building, mill and
plant, employees’ housing or other Infrastructure whether movable or immovable
constructed by Golden Ridge in the Contract Area or acquired by Golden Ridge and
used in connection with Operations.
“Minister” means the Minister of Government responsible for mining.
“Notice” means notice given in accordance with Section 25.
“Operations” means any and all activities and transactions conducted by or on behalf
of Golden Ridge in connection with Exploration, Development, Production and
reclamation and the financing of any of them.
“Parliament” means the Parliament of the Republic of Ghana or any successor
legislative entity or authority.
“Party” means the Government and Golden Ridge (as well as any permitted assignee
of either of them).
“Permissible Debt” has the meaning given in Section 8.1.
“Person” means any natural person and any legal person. For purposes of this
Agreement, a natural person means a human being and a legal person means a
partnership, joint venture, corporation, limited liability company, trust, estate, or any
entity that is recognized by the laws of any state as a distinct legal entity, as well as a
government or state, and any branch, division, political sub-division or region,
instrumentality, authority or agency of any government or state.
“Prevailing Market Rate of Exchange” means the predominant rate, expressed in
' Dollars, on any day during wtuen Golden Ridge^ engages UTaforeign exchange
transaction under this Agreement, at which willing sellers and willing buyers, acting
at aim’s length, in the ordinary course of business have most recently purchased or
sold or agreed to purchase or sell Ghana Cedis or any other currency except Dollars.
----<-cErndnction” mean s-the-commercial-exploitation-ofMinerals-foundin-th&-Pfodu6tion-
Area and all other activities wherever performed that are incidental thereto Including
the design, construction, installation, fabrication, operation, maintenance and repair of
Mining Plant or other Infrastructure, facilities and equipment and the mining,
excavation, extraction, recovery, handling, beneficiation, processing, milling,
stockpiling, transportation, export and sale of Minerals.
‘Traduction Area” means any area designated by the Akyem Mining Lease as the
“Lease Area” or a part of the Lease Area.
“Profound Changes in Circumstances” has the meaning given to such term in
Section 11.
“Royalty” has the meaning given to such term in Section 5.2(f).
“Signature Date” means the date stated at the beginning of this Agreement.
“Stability Period” means the total of the Basic Stability Period as well as any
Extended Stability Period as those terms are defined in Sections 4.1 and 4.3
respectively.
“Taxes and Duties” means any direct and indirect income, profit, excess profit,
windfall profit, additional profit, supplementary charge, gains, capital gains,
corporation, dividend, interest, financing, net worth, sales, goods, transaction, payroll,
import; export, customs, consul, inspection, foreign exchange, value added,
consumption, supply, use, turnover, severance, stumpage, cash flow, rental, land
rental, surface rental, withholding, property, land, stamp and other taxes, duties, foes,
levies, excises, rates, charges, imposts, surcharges, royalties, penalties and any other
Government imposed revenue payments of whatever nature and however called,
whether paid to the Government or to any other Person at the directive of the
Government or under Law and whether similar or dissimilar to any of the foregoing.
“Transition Period” has the meaning given in Section 8.2.
1.2 This Agreement shall be read with such changes in gender and 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.
1.3 Unless otherwise stated, a reference to “hereof*, “hereunder*’, “herein” or words of
similar meaning, means this Agreement and its appendices. The words “and” and “or”
includes the conjunctive and disjunctive, as the context may require or permit. The
word “include” (and any variation of that word) means “including but not limited to”.
Each of the Parties to this Agreement have participated in the drafting and negotiating
of this Agreement and this Agreement shall not be construed against either Party as
the drafting Party.
1.4 This Agreement shall from the Effective Date supersede the 2003 investment'
Agreement and shall be the sole agreement between the Government and Golden
Ridge in respect of the Akyem Mining operations. Except as otherwise provided by
its terms, this Agreement shall have prospective effect only and the rights and
obligations of the parties under the 2003 Agreement as they relate to activities prior to
the Effective Date shall remain subject to the terms of the 2003 Agreement.- --- ---
2. EFFECTIVE DATE
2.1 This Agreement shall become effective and binding on the Parties on the latest of:
(a) the date on which it is ratified by Parliament;
5
(b) the date on which the Akyem Mining Lease is ratified by Parliament;
r (c) the date on which the terms of Section 5 of this Agreement are approved by a
resolution of Parliament pursuant to Article 174(2) of the Constitution of
t Ghana; or
(d) the date on which the Ahafo Revised Investment Agreement becomes
effective.
2.2 The terms of this Agreement, including the provisions of Sections 22 and 24, shall
also control and govern the rights of the Parties under the Akyem Mining Lease. In
the event of any conflict between the terms of this Agreement and the Akyem Mining
Lease, the terms of this Agreement shall prevail. The Parties acknowledge and agree
that, other than to the extent of any such conflict, the Akyem Mining Lease shall
remain valid and in full force and effect.
3. TERM OF THE AGREEMENT
The original term of this Agreement shall commence on the Effective Date and,
unless sooner terminated under Section 22 below shall, subject to Sections 22 and
4.1, continue for so long as Golden Ridge (or any assignee) is the holder of the
Akyem Mining Lease and such lease is valid and in good standing.
4. STABILISATION
4.1 Except as otherwise provided in this Agreement, the Taxes and Duties payable by
Golden Ridge as set forth or described in this Agreement or as otherwise required by
Law and assessed in keeping with the terms of this Agreement shall be stabilised up
to December 31,2027 (the <(Basic Stability Period”).
4.2 During the Basic Stability Period and any Extended Stability Period, and except to the
extent otherwise provided by the terms of this Agreement, Golden Ridge shall not be
affected by any Law enacted after January 1,2014 or by any changes to any Law in
existence as of January 1,2014 if such new Law or amended Law has the effect either
of imposing upon Golden Ridge any new or additional Taxes and Duties or of altering
(a) the basis for determining or calculating the Taxes and Duties applicable to
Golden Ridge; and
(b) the level or rate of Taxes and Duties to which Golden Ridge is subject.
4.3 The Baric Stability Period shall be extended for a single additional term of five (5)
i years (the “Extended Stability Period”) after the date of its termination if:
I
i under-a-pten^the-^Extension-PIatf^rpresented-to and-aeecpted^fbr-purposes-
of this Section 4.3) by the Minister, Golden Ridge commits to make an
additional investment of at least three hundred million Dollars
r (US$300,000,000) in the mining project which is the subject of the Golden
1. Ridge Mining Lease with respect to activities not previously approved by the
i Government, provided that the period for the completion of tire Development
in connection with the additional investment described in the ^tension Plan
shall not exceed four (4)'years; and
6
tlie additional investment is projected under the Extension Plan to result in any
one of the following:
(i) an increase in gold production by Golden Ridge of at least ten per cent
(10%) when compared to the average of the three (3) calendar years
before the completion of the Development described in the Extension
Plan and financed by the additional investment;
(ii) an increase by at least three (3) years in the life of the mine which is
the subject of the Akyem Mining Lease;
(iii) an increase of at least ten per cent (10%) in the number of permanent
employees who are citizens of Ghana employed by Golden Ridge at
the mine which is the subject of the Akyem Mining Lease when
compared to 31 December of the year prior to the year in which
Golden Ridge began construction or other activity required to complete
the Development described in the Extension Plan and financed by the
additional investment; or
(iv) the satisfaction of any other measure approved by the Minister.
The Minister’s acceptance of the Extension Plan shall not be unreasonably
withheld and shall be deemed to have been given if Notice of disapproval has
not been received by Golden Ridge within 120 days of delivery of the
Extension Plan to the Minister. The Minister shall specify in writing the
grounds for non-acceptance of the Extension Plan for purposes of this
Section 4.3.
Fulfilment of the measures described in Section 4.3(b) and set forth in the
Extension Plan shall be deemed to have occurred it within one (1) year after
the completion of Development with respect to an additional investment
project, any one of the conditions set forth in Section 43(b) and as described
in the Extension Plan has been met or, in the case of Section 4.3(b)(ii), it can
be demonstrated to the reasonable satisfaction of the Minister that activities
have been completed and given effect such as will permit the attainment of
that condition.
Should tiie conditions described in Section 4.3(a) and 4.3(b) foil to be satisfied
on thebasis-and-within the period described-in Sections 43(b)-and-4.3(c) and
in the Extension Plan unless such failure is due to Force Majeure or to action
taken or inaction by the Government after acceptance of the Extension Plan
that prevents the satisfaction of any of the relevant conditions in the Extension
Plan, the Government may rescind the Extended Stability Period and Golden
Ridge will thereafter become liable for anv additional Taxes and Duties that
would have accrued but for the extension of the Basic Stability Period.
Any dispute arising out of or in relation to this Section 4.3 shall be subject to
the provisions of Section 24.
JU*'
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5. TAXES AND DUTIES
With effect from the Effective Date and for the duration of the Basic Stability Period
and any Extended Stability Period only, the following shall apply:
5.1 General
Golden Ridge shall be subject to all Taxes and Duties in force in Ghana from time to
time under Law except:
(a) where Golden Ridge is exempt wholly or partly from the application of a Law
relating to Taxes and Duties pursuant to a validly granted authority under any
applicable Law; or
(b) as otherwise provided in this Agreement.
5.2 Stability Regime
Golden Ridge shall be subject to taxation on its income at the rates and on the basis
provided by Law except that during the Basic Stability Period and any Extended
Stability Period (notwithstanding the provisions of any Law to the contrary):
(a) Corporate Income Tax Rate and Basis
(i) the rate of corporate income tax applicable to the taxable income of
Golden Ridge derived from its Operations shall be thirty two and a half
per cent (32.5%);
(ii) subject to the other provisions of this Section 52. and, except as may
be otherwise provided by this Agreement, Golden Ridge’s taxable
income shall be determined on the basis stipulated by Law in effect on
January 1,2014 with all writeoffs, deductions, reliefs and allowances
permitted or allowed by the Law as at that date;
(ii!) Golden Ridge may deduct for purposes of determining taxable income
a fee for management and technical services provided by an Affiliate
in an annual amount that in aggregate shall be 2.25% of either
(A) total revenues from Production or other Operations in the
relevant FiHahcial’Year; or
(B) if before the start of Production or during other periods when
Production has been substantially interrupted, Development
capital expenditures in the relevant Financial Year.
The management and technical services fee of 2.25% of either total revenues
or Development capital expenditure that is permitted under this Section to be
paid during each year to an Affiliate shall for purposes of this Agreement be
deemed to represent a fair arm’s length fee as would apply between unrelated
parties in the ordinary course of business for the provision of such services.
8
Civ) the tax written down value of any capital assets acquired by Golden
Ridge before the Effective Date having first been depreciated in
accordance with the provisions of the 2003 Investment Agreement *
(and with the addition of the five per cent (5%) uplift on class three i
assets) shall be pooled with all capital assets of the same class acquired „
after the Effective Date and thereafter depreciated as permitted by Law
in effect as of January 1,2014.
(v) Any other income earned by Golden Ridge from activities in Ghana
that is not derived directly or indirectly from Operations or Production
shall be taxable under Law.
(vi) Golden Ridge’s taxable income shall be determined in Dollars in
accordance with Law, except as otherwise provided in this Agreement.
(vii) The payments to be made by Golden Ridge to the Government under
Sections 6.1 and 6.2 shall not be deductible for the determination of
taxable income but the payment to be made pursuant to Section 6.7
shall be deductible.
(b) Local Taxes and Duties
Golden Ridge shall pay Taxes and Duties imposed by local or municipal
governments under authority granted by Law. Golden Ridge shall not be
liable to pay any such Taxes and Duties imposed by local or municipal
governments that would impose a disproportionate burden on Golden Ridge
when compared to other Persons in the same category, including Persons
engaged in exploration or mining operations in Ghana. ,
(c) Withholding Taxes
Golden Ridge shall withhold tax on any fees paid for management and
technical services on the basis and at tire rate provided by Law, except that in
the case of payment to an Affiliate for such services the rate shall be ten
percent (10%) of the amount of the fee paid, and Golden Ridge shall pay all
such amounts within the time and in the manner and place required by Law.
Except as provided in this Section, no withholding taxes or other Taxes and
Duties shall be assessed against Golden Ridge or an Affiliate with respect to
©'dividends paid to that-Affiliate; (ii) interest-paid-te-that Affiliate-to-the---
extent that such interest is equivalent to the rate that would be charged by a
third party lender to a borrower in circumstances substantially the same as
those of Golden Ridge; and (iii) any repayment of loan principal paid or
payable to that Affiliate.
(d) Capital Gains Tax
Any capital gains realized as a result of the conveyance or transfer of any
rights under this Agreement or of the Akyem Mining Lease shall be subject to
Taxes and Duties under Law provided that in the case of (i) capital gains
realized by Golden Ridge the provisions of Section 5.1 shall apply; and (ii) no
T-AA-
by Golden Ridge or an Affiliate and arising out of the realization of a
chargeable asset from a merger, amalgamation, or re-organization of Golden
Ridge or an Affiliate where the Affiliate (or Affiliates) that owns or controls
all other Affiliates involved in such transactions will retain at least a 25%
beneficial ownership interest in Golden Ridge when die conveyance or
transfer has been completed. For the purposes of this Agreement “re¬
organization” shall mean an internal restructuring or reallocation of the
ownership of Golden Ridge such that ownership passes from one Affiliate to
another.
(e) Import Duties and Excise Taxes
0) Golden Ridge shall be exempt from Taxes and Duties on the import of
plant, machinery, equipment, parts, fuels and petroleum products,
supplies and accessories, as well as other items listed in the Mining
List (a copy of which is attached hereto as Appendix D), and imported
necessarily, specifically and exclusively for Operations.
(if) Where an item becomes necessary to import for die use of Golden
Ridge as a result of advances in technology, or to replace an item on
the Mining List that has been rendered obsolete or taken out of
production or for any similar reason, Golden Ridge shall make a
representation to the Minister as to why such item is necessary for
import and should be exempt from customs import duties and tire
Minister shall give due consideration to such representation in the light
of the Mining List and applicable Law.
(f) jRoyalty
(i) Royalty Rate:
Golden Ridge shall pay to the Government in Dollars a royalty at the
percentage rate specified below on the total revenues received by
Golden Ridge from the sale of Minerals obtained from the Production
Area during each calendar month (the “Royalty”). This rate has been
increased by the addition of 0.6% as a special fee because the Golden
Ridge Operations involve mining in a forest reserve area. With the
addition of the forest reserve area special fee, the royalty rate is as
-follows:--- • - - ------
(A) gold according to a sliding scale starting at a floor of 3.6% at a
gold price below US$1,300 per ounce, increasing to 4.1% at a
gold price between US$1,300 and US$1,449.99 per ounce, to
4.6% at a gold price between US$1,450 and US$2,299.99 per
ounce and to 5.6% at a gold price of not less than US$2,300 per
ounce, as set forth and illustrated in Appendix B; and
(B) all other Minerals, at a rate pursuant to Law and subject to
Section 14.1 below.
10
The payment of Royalty by Golden Ridge to the Government shall be
made within thirty (30) days after the end of the calendar month in
which the gold or other Mineral subject to such Royalty was sold.
Appendix B hereto illustrates the basis and calculation of the Royalty. 6
(ii) Determination of Gold Price-.
(A) For the purposes of Section 5.2(f)(i)(A) above, the price for
determining the applicable Royalty rate on the sliding scale
shall be the average of the quoted gold price on the daily
London Bullion Market Association Gold Fix (the “London
PM Fix”) for each calendar month with respect to sales of gold
during such month.
(B) Should the London PM Fix cease to exist, then the Parties shall
choose an alternative market index as set forth in
Section 6.2(d).
(iii) Right to Take Royalty in Kind:
(A) The Government, acting through the Minister, may take all or a
part of the Royalty to which it is entitled in this Section 5.2(f),
in gold that has a value based on the London PM Fix (or an
alternative index in the circumstances provided for by this
Section 5.2(f) and Section 6.2(d)) equivalent to the Royalty
amount in Dollars payable to foe Government oh the day it is
payable.
(B) Where foe Government desires to take its Royalty share or part
thereof for tire next Financial Year in gold, the Minister shall
elect to do so by giving Notice to Golden Ridge not less than
six (6) months prior to foe beginning of that Financial Year.
Such election may be revoked by mutual agreement between
foe Parties if the Government gives at least one month’s Notice
before any gold to be delivered under this Section 5.2 is
scheduled for delivery.
(C) Should foe Minister make the election to take all or a part of foe
--Royalty in gold*as-described in Section-5i2^)(iii)(A) above,.foe-
Parties shall meet to agree upon the specific terms and the
process for such transfer or delivery of gold which shall be
consistent with standard practice as between buyers and sellers
of gold. If foe Parties have not agreed on the transfer, delivery
__and other terms_by a date that falls one month prior to the _
scheduled delivery date for such gold, then the Government
shall receive the Royalty in Dollars in accordance with Section
5.2(f)(1)(A) above.
(g) Value-Added Tax
Except as otherwise provided in this Agreement, Golden Ridge shall be
exempt from the payment of Value-Added Tax (VAT) on:
(i) all items it imports, and
(ii) all local purchases of services, goods and supplies to the extent used in
connection with Operations.
Gold and other Mineral that Golden Ridge may sell for export to Persons
outside Ghana, or sell or convey to the Government pursuant to this
Agreement, shall be zero rated for VAT purposes.
Notwithstanding the above and for the avoidance of doubt, Golden Ridge shall
be subject to VAT on the items listed in Appendix E to this agreement.
The Government is in process of considering certain changes to the
administration of the VAT. When such changes are fully implemented, the
Parties agree to confer regarding any amendment of tills Section 5.2(g) as may
be jointly agreed to by them to be appropriate in the light of such changes to
the Law governing VAT.
Integrated Activity'
Golden Ridge’s Operations in respect of the Contract Area shall, for the purposes of
any Law relating to the calculation of applicable Taxes and Duties, be deemed to be a
single, integrated activity. Accordingly, all write-offs, deductions, reliefs and
allowances incurred by or on behalf of Golden Ridge relating to Operations in respect
of the Contract Area may be deducted from any income or profits of Golden Ridge
arising from the Operations for puiposes of determining any applicable Taxes and
Duties.
GOVERNMENT CARRIED INTEREST
Nature of Government Interest
In satisfaction of the requirements of section 43 of the Minerals and Mining Act; Act
703, or of any other Law that reserves for the Government a ten per cent (10%) free
carried, fixed, non-equity-interest m theuperations or uowen ±Odge"(in respect of
which financial contribution shall not be paid by the Government), the Government
shall receive and Golden Ridge shall make the following payments:
(a) a sum equal to l/9th of the total amount paid as dividends to the shareholders
----o&Golden-Ridgeon-eacIwoccasieR-when-dividends-are-distributed-by-Gelden-
Ridge, less any advance payments made pursuant to Section 6.2 below; and
(b) any guaranteed annual advance payments made pursuant to Section 6.2 below.
For the avoidance of doubt, the Parties affirm that the interest provided to the
Government and described above is a non-equity interest in Golden Ridge Operations.
1
12
6.2 Guaranteed Advance Payments to the Government
Notwithstanding any other provision of this Agreement, beginning as of January I,
2018, the fifth complete year after the start of Production of gold by Golden Ridge in
Ghana under the Akyem Mining Lease, and for each year thereafter in which the
average of the quoted gold price on the London PM Fix for such year was equal to or
more than US$1,300 per ounce, the Government shall, subject to the following
conditions having been satisfied and as an advance against the payments provided for
in Section 6.1(a) above, receive 0.6% of the gross value of all Minerals produced,
saved, sold or otherwise disposed of from the Production Area:
(a) at the end of each calendar year, the eligibility of the Government to receive
an advance payment shall be determined on the basis set forth above in this
Section 6.2, and if any advance payment is due to the Government it shall be
made by Golden Ridge not later than June 30th of the calendar year after the
calendar year with respect to which the advance payment is due;
(b) any advance payment made at any time to the Government (or to any other
Person at the Government’s direction) shall be deducted from any future
payments to which the Government is entitled under Section 6.1(a);
(O) upon termination of Operations or mine closure in respect of the Akyem
Mining Lease there shall be no recovery from the Government of the
difference between the aggregate advance payments made to the Government
under this Section 6.2 and the total amount due to the Government under
Sections 6.1 (a) and 6.5; and
(d) should the London PM Fix cease to exist or be quoted, or in any case should
the Parties so elect in writing, they may by mutual agreement designate
another objective market index as the basis for determining the average price
during a given year at which willing sellers and willing buyers acting at arm’s
length sold and bought gold at specified levels of purify during the year in
question. Once they have so agreed, then that price shall be the average price
at which for purposes of this section gold shall be deemed to have been bought
and sold during the year in question.
6.3 Permitted Payments and Distributions to Golden Ridge from Operations
GoldenrRidge shall notpay urdistributeany amount-to-an Affiliate other-tham---
(a) to repay the principal oft and to pay interest, on a loan from an Affiliate;
(b) as a distribution of dividends to an Affiliate subject to Section 6.1(a) above;
(c) as payment of management andTechmcal services feeson thebasis set torth in
this Agreement;
(d) as payment for goods or sendees provided to Golden Ridge by such Affiliate;
and
(e) as reimbursement of costs incurred by an Affiliate on behalf of Golden Ridge
and with its authorization, on a Dollar for Dollar basis. ’
13
6.4 Entitlement to Section 6.3 Payments
The Government shall not receive a payment pursuant to this Section 6 with respect to
the items specified in Section 6.3(a) to (e).
6.5 Termination Payments
On termination of Operations or mine closure, in respect of the Akyem Mining Lease,
Golden Ridge shall:
(a) pay or otherwise satisfy any liabilities including Taxes and Duties and make
appropriate provision as required by Law for unknown or contingent liabilities
(including reclamation and similar costs not otherwise provided for); and
(b) undertake reasonable efforts to collect all amounts due Golden Ridge by any
Person (or to offset any such amounts due to Golden Ridge from a Person
against amounts due to such Person by Golden Ridge as permitted by Law or
(his Agreement).
Following settlement of all such payments and offsets referred to in Section 6.5(a)
above, Golden Ridge shall pay to the Government ten per cent (10%) of its net
remaining cash and may distribute the balance remaining after such payment to (he
Government as a dividend to its shareholders without further obligation to the
Government under Sections 6.1 and 6.2.
6.6 Formula Exhibit
A formula to illustrate the basis and calculation of the distribution of payments to the
Government under this Section 6 is contained in Appendix C.
6.7 Additional Payments to be made to the Government
Golden Ridge shall pay to the Government an additional amount of four million
Dollars' (US$4 million) within thirty (30) days after the Effective Date in
consideration of the exemptions from Taxes and Duties and the special treatment of
certain items for tax purposes in Section 5 hereof.
7. FINANCIAL REPORTING, CURRENCY AND ADEQUATE CAPITAL
7.1 Currency for Accounting
Accounting by Golden Ridge under this Agreement shall be in Dollars and any
-amounts-paid-or-reeeivedT-and-obligations-ineufjfed-or-transactiotts-carried-outrin-
Ghana Cedis or in any Foreign Currency other than Dollars shall be converted to
Dollars at the Prevailing Market Rate of Bxcliange between Dollars and Ghana Cedis
or any other Foreign Currency on the date of the applicable transaction in accordance
with generally accepted accounting principles based on IFRS standards.
Notwithstanding the foregoing, and solely for informational purposes
14
of the Government with respect to any financial year, Golden Ridge shall also keep a
set of books in Ghana Cedis.
7.2 Exchange Control
(a) Golden Ridge may, without restriction, directly or indirectly, of the
Government, obtain, hold, deal with and disburse funds in any manner,
currencies and places as it chooses, provided that, except during the last two
(2) years of Operations when no specific minimum shall apply, Golden Ridge
shall return to Ghana a minimum of 30% of its gross proceeds from the sale of
gold towards its obligations in Ghana for Taxes and Duties, wages, salaries
and employee benefits and other payments for goods and services. If any of
the gross sales proceeds of Golden Ridge result from the sale of gold within
Ghana (or from the payment of Royalties in gold under Section 5.2(f) and such
proceeds are remitted to bank accounts within Ghana or conveyed in gold to
the Government, the obligation of Golden Ridge to return a minimum of 30%
of its gross sales proceeds to Ghana shall be reduced by such amount or by the
value of any gold conveyed to the Government pursuant to Section 5.2(f) or
otherwise in an amount mutually agreed by the Parties.
(b) Subject to Section 7.2(a) above, and without limiting the rights granted in that
Section, Golden Ridge has the unrestricted and unencumbered right to sell and
receive payment for Minerals in any currency, and the proceeds from such
sales may be deposited in bank accounts outside of Ghana and held there or
remitted from there to anywhere in the world, in any currency.
(c) Golden Ridge shall maintain at least one bank account with a commercial
bank or financial institution in Ghana and, as soon as is reasonably practicable »
after a transaction with that bank, shall provide notice to the Bank of Ghana of
any dealing in foreign exchange.
(d) Golden Ridge may acquire Ghana Cedis at the Prevailing Market Rate of
Exchange, and also exchange Ghana Cedis for Foreign Currency at tire
Prevailing Market Rate of Exchange provided that any of the above
transactions in Ghana shall comply with applicable Law including any
requirement that such transactions in Ghana be conducted with Persons
authorized by Law to engage in such transactions. Additionally, any and all
transactions between the Government and Golden Ridge relating to Taxes and
Duties stated in Ghana Cedis will be conveftwl to Dollars arthe~Prevailing ---
Market Rate of Exchange except tor Golden Ridge’s withholding obligations
under Law which shall be governed by and subject to Section 73.
73 Currency of Payment
Payment of Golden Ridge’s obligations to the Government tor Taxes and Duties shall
be in Dollars, subject to Section 7.4, unless the Parties otherwise agree. Any
obligation originally stated in Ghana Cedis, or in any Foreign Currency other than
Dollars, will be converted to Dollars at the Prevailing Market Rate of Exchange.
However, Golden Ridge shall pay sums it collects on behalf of the Government,
including, but not limited to, Taxes and Duties withheld from the salaries or wages of
its employees, and any other sums payable to other Persons from which a portion is
15
9-""
• /i\
required by Law to be withheld or retained by Golden Ridge on behalf of the
Government, in the currency in which such salaries or wages or such other sums are
paid. Golden Ridge may make all other payments whether to the Government or to
other Persons in Ghana Cedis in accordance with Section 7.2(d).
j 7.4 Right to Remit and Receive Payments
Golden Ridge may remit and receive in Dollars all payments of dividends, interest,
| finance charges, principal, management and technical services tees (subject to the
limitations set forth in Section 5.2(a)(iii)) and other properly payable items arising
from, as a result of, or related to Operations.
| 8. ADEQUATE CAPITAL
8.1 Golden Ridge shall maintain a ratio of Indebtedness to Equity Capital of 2:1 or such
| other higher ratio as may be permitted by Law, excluding for these purposes any
’ Indebtedness that is non-interest bearing (any non-interest bearing Indebtedness and
other Indebtedness within the permitted ratios is referred to as “Permissible Debt”).
| The penalty tin: failure to maintain a 2.1 ratio of Indebtedness to Equity Capital shall
' be that any interest or currency exchange losses accrued and attributable to the excess
Indebtedness other than Permissible Debt shall not be deductible for the purposes of
| determining its taxable income.
8.2 Notwithstanding Section 8.1, Golden Ridge shall have up to December 31st of the
I fourth calendar year after the Effective Date to achieve a 2:1 ratio of Indebtedness to
[ Equity Capital or such higher ratio as may be permitted by Law (the transition
Period”). During the Transition Period any Indebtedness to Equity Capital that does
j not exceed 4:1 (or that is otherwise permitted by Law) shall be Permissible Debt. The
j ratio shall be determined annually by reference to the most recent audited financial
statement of Golden Ridge and if the audited financial statement should reveal that
Golden Ridge is not in compliance until the requirements of this Section 8.2, then the
penalty set forth in Section 8.1 shall apply.
9. AFFILIATED COMPANY TRANSACTIONS
9.1 Transactions including the purchases of goods and services and the provision of loans
and the accrual of interest between Golden Ridge and an Affiliate or any other Person
| of whom Golden Ridge or an Affiliate of Golden Ridge is a controller shall unless
i....... -otherwise-provided by-this-Agreementor applicabfcrfcaw be-conducted on-an arm?s-
length basis as would occur between unrelated parties and as required by Law. On
request from the Government, Golden Ridge shall provide documentation of the
prices, discounts and commissions and a copy of any contracts and other relevant
documentation related to transactions with Affiliates.
> _______________ _
] 9.2 For the purposes of this section, ‘controller* shall have the meaning given to it by
Section 111 of the Minerals and Mining Act, 2003 (Act 703).
10. MISCELLANEOUS PROVISIONS
10.1 Golden Ridge Board of Directors
The Government may nominate a Person chosen in its discretion who is qualified and
permitted under Law to serve as a member of the board of directors of Golden Ridge •«
after giving not less than thirty (30) days’ Notice of its intention to do so, and
providing the identity of the proposed director and any other information reasonably
necessary in order for Golden Ridge and the shareholders of Golden Ridge to take
such steps as are necessacy to complete such nomination. Such Person upon being
duly elected shall be subject to the confidentiality requirements generally applicable
to all Golden Ridge directors as regards the disclosure of information obtained in his
or her capacity as a director to any Persons other than the Government or Golden
Ridge or as required by Law. The director thus appointed may be removed as
permitted by Law for cause, in which event the Government may nominate a
successor.
10.2 Non-Discrimination
Except as otherwise expressly provided or permitted herein, the Government affirms
that when compared to other Persons engaged in exploration for or mining of gold in
Ghana, Golden Ridge shall have fair and equitable treatment and shall not be
discriminated against or made uniquely or disproportionately liable to obligations by
virtue of any Law or any action taken by the Government.
10.3 Governing Law S
This Agreement shall be construed and interpreted in accordance with the laws of
Ghana and by such rules and principles as are generally recognized by international
law to be applicable to an investment by nationals of one country in another country.
10.4 Joint Affirmations of file Parties
Golden Ridge shall in all respects be subject to Law and to each term of this
Agreement as regards its presence and activities in Ghana. The Government hereby
affirms that it shall also be bound by and shall honour each term of this Agreement,
and that Golden Ridge may fully rely on that affirmation. The Parties jointly further
affirm that they shall each uphold and honour the rights and remedies provided herein
-to-the other Party-including the indemnification provided-by---Seefron 20. of this.
AgreemenL
11. PERIODIC REVIEW
11.1 Profound Changes in Circumstances
For die 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 under this Section 11.1, the Government and Golden Ridge shall at the
request of tire other consult together. The Parties shall meet to review the matter
raised as soon after the request as is reasonably convenient for them both. In case
Profound Changes in Circumstances are established to have occurred, the Parties shall
Q
17
effect such change in or clarification of this Agreement as they agree is necessary.
For purposes of this Agreement, “Profound Changes in Circumstances” shall mean
such changes in the economic conditions of the gold mining industry worldwide or in
Ghana, or such changes in die economic, political or social circumstances existing in
Ghana 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 the Effective Date (or the time after any subsequent review pursuant to this
Section 11.1) that the overall balance of equities and benefits reasonably anticipated
by them will no longer be achievable as a practical matter.
11.2 Other Consultation
In addition to the consultation provided by Section 11.1, 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 under this Agreement or any matter relating to
Operations. The Parties shall meet to review the matter raised as soon after such
request as is reasonably convenient for than both. Subsequent to the consultation, the
Parties shall take the action, if any, that is mutually agreed to address the matter.
12. EMPLOYMENT AND TRAINING
12.1 Employment
To the extent that Persons having the requisite skill and experience are available for
and willing to accept employment with Golden Ridge, Golden Ridge shall employ
(and shall give preference to the employment of) such qualified Persons who are
citizens of Ghana (and to such other Persons as the Law may require) for skilled
technical, administrative, financial and managerial positions in accordance with Law
for the purpose of ensuring that managerial functions of Golden Ridge at all levels
including technical and senior executive levels shall be substantially performed by
citizens of Ghana. Notwithstanding the foregoing, Golden Ridge shall have the right
freely to appoint and employ as its Chief Executive Officer, Chief Financial Officer
and Head of Operations Persons who may be either Ghanaian citizens or citizens of
any other nation, except:
(a) where any individual may be disqualified by Law from entering or residing in
Ghana; or
(b)---where-au iinlividual'is'from-a-nalfan'whose~citizens'may as ^general category
be banned by Law fiom residing or working in Ghana.
Golden Ridge shall, subject to the foregoing, also have the right at all times to choose
its employees freely and without restriction. Golden Ridge and the Government shall,
from time, to time and as permitted bv Law, determine how to_accomplish_the
objectives set forth above in this Section which shall guide and control their
deliberations and decisions. The Government shall issue such permits as may be
required by Law to allow such Persons who are not citizens of Ghana freely to enter
into, work and reside in Ghana in connection with Operations, and to depart fiom
Ghana. Any disputes arising under this section shall be considered a dispute subject
to resolution pursuant to Section 24.
18
/>.•
12.2 Training of Ghanaians
Golden Ridge among other measures shall provide on a continuing basis for the
training of suitable Ghanaian citizens in order to qualify them for skilled, technical,
administrative and managerial positions and to meet the objectives set forth in
Section 12.1 above. Golden Ridge shall submit to the Minister a detailed program for
the recruitment and training of Ghanaian citizens in connection with Operations
pursuant to the Akyem Mining Lease and will update this program as required by
Law.
13. USE OF GHANAIAN GOODS AND SERVICES
13.1 Golden Ridge shall, in accordance with Law and to the maximum extent possible and
consistent with safety, efficiency and economy, when purchasing goods and services
required with respect to Operations, give preference to materials and goods made in
Ghana, and services provided by Ghanaian citizens (and such other Persons as the
Law may require) as well as entities incorporated or formed in Ghana and majority
owned and controlled by citizens of Ghana (and by such other Persons as the Law
may require) who receive a share of the benefits of such entities proportionate to their
ownership interest, provided that such goods and services are equal in qualify, terms,
deliveiy, service; quantify and price to, or better than, goods and services obtainable
outside Ghana. Nothing in this Section 13 shall require Golden Ridge to act upon
considerations other than commercial considerations.
14. INCIDENTAL RIGHTS
14.1 Use of Resources
Except as otherwise provided in this Agreement; Golden Ridge may, within the
Contract Area and for its own use, remove, extract and use water, gravel, sand, clay,
stone, other Minerals (except for gold, diamonds and other precious Minerals) and
timber (except for protected species, insofar as they do not interfere with or hinder
Operations) in accordance with Law.
14.2 Imports
Golden Ridge may import and use in respect of Operations, and subject to Section 23
and in accordance with Law subsequently export any machinery, equipment,
-eensumable itemsjHfeclSr explosives-and-aay-other-thing~whats©@ver- reasonably-
required with respect to Operations, including, without limitation, the items listed on
the Mining List attached hereto as Appendix D. Golden Ridge shall notify the
Minerals Commission of the export of any machinery, equipment, consumable items,
fuels or explosives and shall at ali times comply with Law regarding the safe use, sale,
__disposal and security of explosives................. _
15. UNDERTAKINGS OF THE GOVERNMENT
15.1 EIcctricify Generation aud Transmission
The Government shall not take any action that would in application or effect deprive
Golden Ridge of the right, or hamper its ability on the same basis as other industrial
19
'“f/tAi
A
users, to purchase or receive electric power sufficient to meet its reasonable needs for
the conduct of Operations in Ghana. The foregoing applies to electric power supplied
by the Government or other Persons that are providers of electric power in Ghana
under license from or authority of the Government. The Government further affirms
that Golden Ridge may, at its own cost and in accordance with Law, generate,
transmit, use and deal with electricity and lawfully obtain electric power from other
Persons who have been so authorized in Ghana by the Government. Golden Ridge
may store, treat, use and provide water in connection with Operations. With respect
to all of the foregoing, Golden Ridge may construct the necessary Infrastructure and
Mining Plant subject to foe requirements of any Law regulating foe manner in which
any of the foregoing rights shall be exercised taking into account the safety of the
public and prevention of harm to the environment
15.2 Issuance of Permits and Necessary Authorization
Requests for licenses, permits, mining titles, easements, and other authorizations
required to permit Golden Ridge to conduct Operations and activities related to
Operations shall be dealt with within the period required by Law. In all cases, the
decision to grant or deny a request for a permit or other authorization, and any license
or title, shall be made in accordance with Law.
15.3 Protection against Nationalization or Expropriation
Except as permitted and required by Article 20 of the 1992 Constitution of foe
Republic of Ghana (and subject both to prompt, adequate and effective compensation
of the affected Party in Dollars and to the rules and principles of international law as
described in Section 10.3 above), the Government undertakes and affirms that it shall
not nationalize or expropriate (or with respect to any of the following take any
measures equivalent to nationalization or expropriation):
(a) any Infrastructure or other property, movable or immovable, owned by Golden
Ridge or subject to its right to possess or use, and whether in its possession or
in the possession of its Affiliates, agents, representatives or contractors;
(b) minerals in any form resulting from the Operations;
(c) any equity, shares or ownership interests of whatever nature held in or owned
or issued by Golden Ridge or its Affiliates;
(d) any structure or entity put in place by Golden Ridge in connection with
Production; and
(e) any capital invested by Golden Ridge in Ghana.
Any "action taxen oy tKe'Govemment pbrsuanf'fo_th'e Constitution OfGhana'aT
described above, or any other action by the Government in violation of the terms of
this Section shall each entitle Golden Ridge in addition to any other remedy provided
by Law, international law or otherwise by this Agreement, to prompt payment by the
Government equivalent to the fair market value of the investment, asset or property
nationalized or expropriated immediately before the nationalization or expropriation
20
> t
(or the measures tantamount to nationalization or expropriation) took place or was
announced.
15.4 Peaceful enjoyment
The Government hereby warrants the title to, possession and peaceful enjoyment by
Golden Ridge of all rights granted by this Agreement and all of its property in Ghana
in accordance with Law.
15.5 Due Authorization
Each Party represents and warrants that it has all necessary power and authority to
execute and deliver this Agreement.
15.6 Production Area
The Akyem Production Area shall be the area covered by and subject to the Akyem
Mining Lease. Golden Ridge may apply for the extension of the term of the Akyem
Mining Lease for such additional term os permitted by Law, and the Government
agrees that it will not unreasonably refuse any application for an extension made by
Golden Ridge up to the maximum period permitted by Law, upon a showing that
sufficient Mineral reserves remain that will permit Golden Ridge to carry out
Operations for the additional term requested.
15.7 Right to Export Minerals and Other Rights
(a) Under the Akyem Mining Lease and under this Agreement, Golden Ridge has
tiie exclusive right, subject to Law, to:
(i) export and sell, without restriction by the Government or any other
Person, Minerals obtained from Operations in a Production Area to any
Person in any country or state,
00 carry on Exploration for Minerals within each Production Area,
(iiQ mine Minerals within each such Production Area,
(iv) subject to Section 12 (a), receive all income and proceeds from the
export or sale of Minerals and to deposit (hem in banks within Ghana
and outside ofGHana of its own choosing; ana
(v) exercise any other rights provided by Law to the holder of a Mining
Lease.
-(b) ---IheJSovemment, acting.thcough.the MmkteiyW tn the agreement of .
Golden Ridge acting in its sole discretion, may purchase quantities of gold
from Golden Ridge on a basis to be decided upon by the Parties at such time,
provided that the price at which the gold may be purchased shall be based on
the London PM Fix on the day of the proposed purchase.
21
15.8 Surrender of Production Area
Golden Ridge may at any time surrender all or part of a Production Area on the terms
of the Akyem Mining Lease, on giving the Minister Notice within the time and in
accordance with the process specified by Law. After surrender of all or any part of a
Production Area, the Akyem Mining Lease shall terminate with respect to the area
surrendered.
15.9 Environmental Compliance and Reclamation
Golden Ridge shall conduct Operations in order to limit to the extent practicable,
adverse impacts to the environment and to comply with Law.
15.10 Right to Additional Areas
(a) Golden Ridge directly or through an Affiliate, and as permitted by Law, may
select as additional areas to the Contract Area (the “Additional Areas”), any
unencumbered areas that have a geological relationship to adjoining
Production Areas or into which extend geological trends from the Contract
Area or from the geographic boundaries of any Mineral body discovered in the
Contract Area.
(b) On and from the date of approval by the Minister of the selection, the selected
Additional Areas shall become part of the Contract Area and toe rights and
obligations of Golden Ridge shall be increased proportionately to take into
account those Additional Areas.
16. CONDUCT OF OPERATIONS
Golden Ridge may conduct Operations by itself or through agents and contractors and shall
do so in a manner consistent with Law and as required (a) by toe terms of this Agreement and
(b) by the terms of the Akyem Mining Lease, except to toe extent that such terms are
inconsistent with the terms of this Agreement in which case toe terms of this Agreement shall
govern the rights and duties of the Parties.
17. LAND AND FACILITIES
17.1 Surface Rights
(a) Golden Ridge may, under the Akyem Mining Lease and subject to toe
requirements of Law, enter upon and utilize all land within toe Contract Area
for purposes of and incidental to Operations.
(b) Golden Ridge may, in accordance with Law, acquire private land outside toe
-eontractrArea_tliut it1 lutends-to~i
Operations being subject to toe Minister’s approval or as provided by Law),
and once so acquired any such private land shall be deemed a part of toe
Contract Area during any period of its occupancy and use by Golden Ridge for
Operations.
For the purposes of Section 17.1(b) “private land” shall mean any land other
than land subject to a lease granted by this Agreement and includes any
22
creeks, streams, rivers, and bodies of water and their residue contained on
such land, that is owned by any Person except the Government, or as to which
any Person except the Government or Golden Ridge has a right of possession
recognized by Law.
17.2 Limitation on Exploration and Production
Nothing contained in this Section 17 shall be construed to permit Golden Ridge to
explore for Minerals or to produce Minerals found in any land that is not within a
Production Area.
17.3 Miniug Plant and the use of Public Infrastructure
(a) Golden Ridge may, subject to Law, acquire, construct, install, maintain and
operate a Mining Plant and other Infrastructure reasonably required for
Operations.
(b) Golden Ridge may use public Infrastructure, owned, operated or provided by
the Government, or by any other Person under license or authority of the
Government, to the same extent that those facilities may be used by others to
meet the needs of Golden Ridge with respect to Operations. The Government
shall ensure that any charges for the use by Golden Ridge of public
Infrastructure, as well as other terms and conditions for such use, are frdr and
reasonable and are not more onerous than those that are generally applicable to
others using similar public Infrastructure in a similar manner.
(c) To the extent reasonable in connection with Operations, Golden Ridge may
integrate any item of Mining Plant with similar items of public Infrastructure,
where it is reasonable and lawful to do so, and subject to prior consultation
with the Government.
The Government reserves the right to construct roads, highways, railroads, telegraph
and telephone lines and other lines of communication within the Contract Area, on
reasonable Notice to and after consultation with Golden Ridge. In the event of such
construction, the Government shall, within sixty (60) days after receipt of an invoice
from Golden Ridge compensate it for any damage caused to Golden Ridge property
and shall indemnify and hold Golden Ridge harmless from any claims by third parties
arising from the construction. The Government shall not engage in such construction
--- if the effect ufrdoing • so will'be~to~disrupt or interrupt-the-ccnduct of Operations-©^
Golden Ridge.
17.4 Contract Area
___ Golden Ridge shall pay ground rent at the rates required by Law for land in a
Production Area to the owner of any land subject to a Mineral Lease except for annual
ground rent for Stool Lands, which shall be paid to the Person designated by Law.
“Stool Lands” shall be lands designated as such by Law.
•
17.5 Payment
Ground rent shall be payable annually in advance within the time required by Law,
and if no such time is specified for payment, then ground rent shall be paid on or
before Januaiy 15th of the Financial Year for which payment is being made, or, with
respect to the first Financial Year after the Effective Date, within ninety (90) days
after the Effective Date.
18. HEALTH AND SAFETY
Golden Ridge shall maintain health and safety standards consistent with International
Standards, its own best practices and the requirements of Law (including regular safety
training instruction for its employees) in connection with Operations and shall report to the
Government on an incident or periodic basis as may be required by Law.
19. CONFIDENTIALITY
t
19.1 Confidential Information
All information, reports, and documents exchanged between, received or acquired by
the Parties in the context of this Agreement, including those conveying geological
information, Mineral reserves, sales data, Production data, the amount set aside as a
reserve for reclamation, financial information and data and all other information
related to Operations shall be considered and treated as confidential information,
subject to Section 19.2 below and applicable Law. The Parties agree not to divulge
this confidential information to any other Person without the prior written consent of
the other Party (which consent shall not be unreasonably withheld) except in the
following cases:
(a) where the information is used by one Party in the course of arbitration or court
proceedings against the other party;
(b) where such information is made available to a third party providing services to
either Party if that third party undertakes an obligation to treat the information
as confidential and use it only for the specified purposes;
(c) where the information is provided to a bank or another financial organization
from which Golden Ridge receives financial assets, under the condition that
---------the-bank- or- financial-organization- undertakes-an- obligation-to-tceat-the____
information as confidential and use it only for the specified purposes;
(d) where disclosure of the information is required in accordance with this
Agreement or with Law, or with the laws of other jurisdictions applicable to
Golden Ridge or its Affiliates (including securities legislation that requires
disclosure' in the jurisdiction of incorporation of an Affiliate); or
(®) where the information is requested by a third party that is interested in
acquiring an interest in Golden Ridge or an Affiliate, subject to the third party
undertaking an obligation to be subject to the confidentiality obligation in this
Section 19.
24
19.2 Public Information
The obligation of confidentiality stipulated in Section 19.1 above shall not apply to
information exchanged between the Parties that is in the public domain.
20. INDEMNIFICATION
Any breach of an obligation in this Agreement by either Party entitles the Parly aggrieved by
the breach to be indemnified by the other Party in an amount equal to the damage suffered by
the aggrieved Party subject to the limitations of Section 24. If a Party is required to make
additional payments, including payments of Taxes and Duties, because of an inability by the
Government to perform for the reasons set forth in this section or a breach as described in this
Section 20, then the party so required shall, upon an award pursuant to any arbitration under
Section 24 with respect to its right to indemnification hereunder, be entitled to set off the
amount of such additional payments against any obligation it may have to make any
payments to the other Party, including payments of Taxes and Duties.
21.. ENCUMBRANCE
Golden Ridge may mortgage, charge or otherwise encumber all or part of its interest under
this Agreement to raise, from one or more Affiliates or third parties, financing for its
Operations and other obligations under this Agreement. The Government agrees that in the
event of default by Golden Ridge a Person who holds such mortgage, charge or other
encumbrance may either conduct Operations to the same extent and on the same basis as
Golden Ridge if it is qualified under Law and has demonstrated the technical and financial
ability to conduct Operations under this Agreement or, with the prior consent of the Minister,
which consent shall not be unreasonably withheld, and as permitted by Law to exercise any
power of sale granted by any such mortgage, charge or other encumbrance.
22. TERMINATION
22.1 Termination by Golden Ridge
Golden Ridge shall have the right to terminate this Agreement (including the Akyem
Mining Lease) at any time, either in its entirety or as to any part of the Contract Area,
(the latter as provided for by Section 15.8), provided that in the case of termination of
this Agreement in its entirety, such termination will be effective 270 days after giving
Notice to the Government. Such termination shall be without prejudice to any
--obligation or liability-ineurred by GoIden-Ridge-ep-an AffiliateiiereundeF-prior to the
effective date of such termination.
22.2 Termination by the Government
The Government shall have the right to terminate this Agreement (including the
Akyem Mining Lease) only as provided herein and subject” to the provisions of
Section 24, if any of the following events (hereinafter called “Events of Default”)
shall occur and continue:
(a) Golden Ridge fails in a material way to comply with its obligations under this 'i
Agreement and the failure has a materially adverse effect on the Government;
(b) Golden Ridge: ■»
25
/y\
(i) voluntarily makes 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) files a petition or application to any tribunal for the appointment of a
trustee or receiver for all or any substantial part of its assets,
(iii) files or commences proceedings for its bankruptcy, reorganization,
arrangement or insolvency under the laws of any jurisdiction, or if any
such petition or application is filed, or any such proceedings are
commenced against it, and Golden Ridge indicates its approval thereof,
consent thereto or acquiescence therein, or
(iv) if any order is entered appointing a trustee or receiver for Golden
Ridge, or adjudicating it bankrupt or insolvent, or approving a petition
in any such proceedings, and Golden Ridge permits such order to
remain in effect for more than ninety (90) days; or
(c) Golden Ridge ceases Production with respect to all Production Areas, fbr a
period of twenty-four (24) consecutive months unless the failure or cessation
is caused by or consented to by the Government or is caused by Force
Majeure.
22.3 Opportunity to Cure
The Government shall provide Notice to Golden Ridge of an alleged occurrence of an
Event of Default on the grounds described in Section 22.2 above and of the.
Government’s position on the matter and shall offer Golden Ridge a fair opportunity
to consult with the Government to resolve die matter. If, after a reasonable period of
consultation, the Government is of the opinion that the matter cannot be resolved by
further consultation, the Government may send to Golden Ridge Notice of the
Government’s intention to terminate this Agreement with respect to Golden Ridge. If
the Event of Default is not cured within sixty (60) days after the Notice, or within
such longer period as may be necessary to allow a reasonable period of time to effect
the cure, then this Agreement shall be terminated with respect to the Party.
22.4 Disputes Regarding Events of Default
-Notwithstanding-the-provisions- of Section-22.y if- Golden-Ridge-disputes-whether-
there has been an Event of Default and refers such dispute to arbitration in accordance
with Section 24, or demands non-binding mediation and/or conciliation as required by
i Section 24.1, within sixty (60) days after receipt of the Government’s Notice of its
intention to terminate, termination of this Agreement shall not take effect until the
_conclusion of the arbitration or non-binding mediation and/or conciliation processes,
and shall be in accordance either with an accord reached by the Parties after any
mediation or conciliation or with an arbitration award upholding the Government’s
right to terminate.
26
23. DISPOSITION OF ASSETS
On termination of this Agreement, in its entirety the Mining Plant shall remain the property
of Golden Ridge and may be transferred to an Affiliate or to a third party within or outeide
Ghana in accordance with Law. The Government may also require Golden Ridge to remove
from the Contract Area any Mining Plant, including unusable assets, which are within the
Contract Area after termination.
24. ARBITRATION
24.1 Submission to Arbitration
Any dispute between the Government and Golden Ridge that arises 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 Golden Ridge 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
and in accordance with the rules of the Centre in effect on the Effective Date except to
the extent in conflict with this Section 24 which shall prevail under those
circumstances, provided that in any event the law governing the rights of the Parties
under this Agreement shall be determined as set forth in Section 10.3 above. Prior to
the submission of any dispute to arbitration the Parties shall consult and negotiate
with each other and use any non-binding mediation or conciliation processes available
in Ghana and, recognizing their mutual interests, attempt to reach a satisfactory
solution, provided that any such procedures need not take place in Ghana but on
demand by any Party shall take place in such other venue as the Parties may agree or
if they cannot agree then in London, England (provided that the travel and
accommodation costs of the other Party shall be borne as provided in Section 24.5
below by the Party making the demand that the mediation or conciliation take place
elsewhere than in Accra, Ghana). The Parties agree that the period set aside for
mediation shall not however bar a Party from applying for urgent interim relief In
any event if the Parties do not reach settlement within a period of 120 days after the
date on which by Notice one Party has informed the other of its intention to seek
arbitration of a dispute as provided hereunder, then, upon further Notice by any party
to the other, any unresolved claim shall proceed to arbitration pursuant to this Section
24. " '
The Parties agree that Golden Ridge’s Operations under this Agreement constitute an
“investment” due to, inter alia, the expenditure of a considerable amount of money in
Ghana, the long term nature of the Agreement and the investment into Ghana’s
--infrastructure ancHhaHor-purposes- of Artfele-2-5(±-)-of the- Convefttioib-anydispute
subject to this Section 24 is a legal dispute arising directly out of an investment
Either of the Parties to this 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.
If the Centre refuses to register any Request for Arbitration or a tribunal declines
jurisdiction under Article 25 of the Convention, then the Parties agree to arbitrate
under the UNCITRAL Rules.
24.2 Nationality for Purposes of Arbitration
Notwithstanding the incorporation in Ghana of Golden Ridge or of any of its
successors or assignees, or of any of its other Affiliates, all these entities shall be
treated under this Section 24 as if they were nationals of the United States of America
for purposes of any arbitration pursuant to the Convention and of this Agreement,
provided such entities are or are controlled by nationals of the United States of
America, except that Golden Ridge 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.
24.3 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
Golden Ridge and one (1) arbitrator, who shall be the president of the tribunal and
shall be a citizen neither of Ghana nor of the United States of America (or of any
other state of which a Parly is a national under Section 24.2), to be appointed by the
Secretary-General of the Centre. In malting such appointment the Secretary-General
shall not be limited to malting an appointment from the Panel of Arbitrators. No such
arbitrator shall have an interest in the matters in dispute.
24.4 Referee
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 stipulated in
Section 24.10 below, except for any dispute arising out of or related to Sections 2, 3,
4, 5, 5.3,6, 7.2, 8, 9, 10.2, 10.3, 10.4, 15.3, 15.4, 15.6, 15.7, 15.8,15.10,20,22,24 or
26 of this Agreement, which must be referred to arbitrators appointed under Section
24.3 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 referee shall act qua expert determiner and not as arbitrator. The decision of the
referee shall be rendered pursuant to Section 24.9 of this Agreement (except as
regards ttieTequirement for a decision by majority vote)'§ft'd sfrairEefmal and binding
unless appealed by any Party to arbitrators appointed as provided in this Section 24.4
who shall examine the referee's decision only as to manifest disregard of law,
findings of feet that are not supported by any credible evidence, and abuse of
authority, misconduct or other unauthorized act by the referee.
24.5 Venue
Without prejudice to Article 62 of the Convention, and except as the Parties may
otherwise agree in writing, the Seat shall be as provided by the Convention. However,
the venue of any hearing conducted pursuant to this Agreement shall be Accra,
Ghana, provided that at the demand of either Party any such hearing may be held
either at a*place mutually agreed *to by the Parties or in 'London, England. However,
28
should either party demand that the hearing take place elsewhere than in Accra,
Chana, then the party making that demand shall be responsible to pay the reasonable
transport and accommodation costs for die representative of the other Party and of its
legal counsel as well for such witnesses resident in Accra, Ghana as the arbitral
tribunal shall determine must appear in person before it to provide testimony. Hie
arbitration proceedings shall be conducted in the English language. Subject to
Section 24.6 below, and except as otherwise provided in this Section 24.S, the arbitral
tribunal shall decide how the costs of the proceedings shall be assessed against and
borne by the Parties. Any procedural issues that cannot be determined under the
arbitral rules of the Centre shall be determined pursuant to Law. Notwithstanding the
venue of the hearing, the law governing the rights of the Parties under this Agreement
shall be determined as set forth in Section 10.3 above.
24.6 Award
The arbitrators shall, by majority vote, render a written decision stating the reasons
for their award within the time required by the applicable rules of the Centre or such
different period as the Parties shall agree. 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). Payment shall be through a bank designated by the recipient, and in the
case of an award to Golden Ridge, shall be exempt from any Taxes and Duties
imposed upon such award by the Government Each Party shall bear its own costs and
attorney fees. Neither Party shall have any liability for either consequential damages
(except for purposes of set off) or exemplary or punitive damages, but interest shall be
at a rate that does not to exceed the London Interbank Offering Rate (LIBOR) existing
at the time of such award, plus 6 percent per annum, 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.
24.7 Waiver of Defences
The Government hereby agrees not to claim and irrevocably waives any defense of
sovereign or other immunity or of the act of state doctrine to a claim asserted under
this Agreement including all claims of immunity from any suit, execution or
attachment. In addition, both Parties waive all defenses to the arbitrators’ jurisdiction
or any other legal process and from the enforcement of any arbitral or other award
rendered" by a tribunalor other Person constituted pursuant to this A'greerrtSRtTTlTS
Parties hereby submit to the jurisdiction of the courts of any state or nation in relation
to the recognition and/or execution of any arbitral award rendered pursuant to this
Agreement, and waive and agree not to claim immunity from the jurisdiction of the
courts of any nation or state in relation to the recognition of any such arbitral award.
24.S Reservation of Rights
The right to refer a claim or dispute to arbitration under this Agreement shall not be
affected by the fact that a claimant 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
24.9 Nature of Award
The Parties agree that the arbitral award of any arbitral tribunal constituted under tins
Agreement may contain orders for specific performance and other equitable relief or
monetary damages in respect of or affecting any of the Parties (as well as any loss or
{ damage suffered by any of them). The Parties shall take all such actions as are
1 necessary to give full and complete effect to the award which, in accordance with its
terms, shall be binding upon and enforceable against them.
|
i 24.10 Successors
; The consent to the jurisdiction of the Centre as stipulated in this Section 24 shall
] equally bind any successor of or successors-in-interest to either Patty to this
Agreement. If the Centre is replaced by, or if its functions are substantially conferred
I upon or transferred to, any other international body of a similar type and competence,
j the Parties may submit any dispute to that body for settlement by arbitration in
accordance with the provisions of this Section 24.
| 25. NOTICES
25.1 Written Communication
1 Any orders, approvals, declarations and notices of any kind between the Parties which
are required, expressly authorized or provided for under this Agreement (referred to
| as a “Communication”) shall be in writing and delivered by hand, by fax, by
! electronic mail, by postage prepaid registered mail, by any other means of
communication agreed upon by the Parties, or under Section 25.3. A duly authorized
g representative of the Party who dispatches the Communication shall also sign the
Communication.
25.2 Delivery
A delivery of a Communication to a Party shall be deemed to have occurred in any
one of the following circumstances:
(a) if the Communication has been sent under Section 25.3 below;
(b) where a duly authorized representative of the Government, in the case of the
------- . finvftmmftnt, nr a corporate officer of finlrfen ftirigp., in the case of Golden
Ridge, has signed a return receipt of registered mail;
j (c) where a fax or electronic mail confirmation of receipt has been electronically
issued to the sender by a receiving device at a fax number or at an authorized
, electronic mail address indicating receipt of a Communication sent via fax or
] electronicmailp - ---'
where verification of receipt of the Communication has been obtained in any
manner specifically agreed to in writing by the Parties; or
1,
(o) where a Party has directly or indirectly acknowledged receipt of the
Communication in writing.
30
25.3 Address
All Communications from the Government to Golden Ridge shall be addressed as
follows:
The Managing Director
Nevvmont Golden Ridge Limited,
Slot Number 40/41 Senchi Street
Airport Residential Area
PMB Airport Post Office
Accra, Ghana
All Communications from Golden Ridge to the Government shall be addressed as
follows:
The Minister
Ministry of Lands and Natural Resources
POBoxM2I2
Ministries
Accra, Ghana
And
The Minister
Ministry of Finance & Economic Planning
PO Box MB 40
Accra, Ghana
25.4 Copies of Communications
A copy of each Communication from one Party to the other may also be sent by the
deposit of the copy in the United States mail, postage prepaid, registered or certified,
to the following addresses:
As to Government:
The Ambassador of Ghana to the United States of America
Embassy of the Republic of Ghana
- 3512-Tntemational Dr.N.W.___ _____ ___
Washington, DC 20008
USA
As to Golden Ridge:
Newmont Mining Corporation
6363 South Fiddler’s Green Circle, Suite 800
Greenwood Village, Colorado 80111
USA
Attn: The General Counsel, Legal Department
2S.S Change of Address
Either Party may upon prior Notice to the other Party change the designation of the
Person named to receive Communications from the other Party, the address or fax
number of the office in Ghana, in the United States or elsewhere authorized to receive
j such Communications or the address or addresses or fax number or numbers of the
I offices to which copies of Communications from one party to the other are to be
delivered.
i
; 26. FORCE MAJEURE
. 26.1 Application
- In the event of a Party being rendered unable, in whole or in part, by Force Majeure to
carry out any obligation under this Agreement, other than an obligation to make
| payments of money that accrued before the commencement of Force Majeure, the
' Person shall give Notice and the particulars of the Force Majeure in writing to the
other Parties as soon as practicable after the occurrence of the cause relied on. The
I obligation of the Party giving the Notice, insofar as it is affected by the Force
I Majeure, shall be suspended during the continuance of such inability. The inability
shall be remedied with all reasonable dispatch, as for as practicable. The time periods
>' specified in this Agreement for the performance of obligations or the enjoyment of
I rights that are affected by Force Majeure, except in connection with an obligation to
make payments of money that accrued prior to the commencement of Force Majeure,
j but including the term of this Agreement, shall be extended by the period of time the
I inability caused by such Force Majeure exists.
| 26.2 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, 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 (2) months), market conditions or
* other factors that render Production uneconomic, fires, explosions, earthquakes or any
other natural disasters, expropriation of facilities or goods, epidemics, public health
emergencies and any similar cause, provided that any such cause was beyond the
---reasonable-control'of thB'PartyTtifflmtag^uspension_and'eou{dirot have’ been'avoftted---
or overcome by the Party through the exercise of due diligence,
i
] 26.3 No Required Settlement
_____Nothing in Sections 26.1 or 26.2 above shall, in and of itself, be construed to require
Golden Ridge to settle any strike, lockout or other labor or industrial dispute except as
may be required by Law.
\
* *
' Tff\
27. ENTIRE AGREEMENT - MODIFICATIONS
27.1 Entire Agreement
This Agreement, including the Appendices attached to it, represents the entire
agreement between the Parties and supersedes any previous oral and written
negotiations and agreements, except for such rights and obligations of the Parties
under the 2003 Agreement that relate to activities prior to the Effective Date which
shall remain subject to the terms of the 2003 Agreement.
27.2 Amendment
Any modification or amendment of any terms of this Agreement shall be by the
mutual written agreement of the Parties and, except as otherwise specifically provided
in this Agreement, shall not become effective until ratified by Parliament. However,
by written agreement, the Parties may amend and alter the terms and provisions of an
Appendix to this Agreement, and take any other action or decision left to their mutual
or individual discretion by the terms of this Agreement at any time throughout the
duration of this Agreement, without the approval of Parliament
28. ASSIGNMENT AND SUCCESSION
The terms and conditions of this Agreement shall inure to the benefit of and be
binding upon the successors, beneficiaries and assignees of the Parties. The rights and
obligations of the Parties under this Agreement shall not be affected by a corporate
merger, consolidation, amalgamation, or other acquisition or change in control of any
Affiliate or parent entity of Golden Ridge.
29. SURVIVAL PROVISION
Notwithstanding termination of this Agreement by either Party or for any reason,
including a termination due to a finding that this Agreement or a portion thereof is
void, invalid, or unenforceable, Sections 1, 10.3, 15.3,20,23,24,25,26 and 29 shall
survive such termination and shall remain effective as to any matters which are the
subject of this Agreement or which arise out of, in relation to or in connection with
this Agreement. This termination shall be without prejudice to rights, duties and
obligations that have accrued before termination. Despite the termination, provisions
of this Agreement that are reasonably necessary for the full enjoyment and
enforcement of-the rights,---duties and obligations-shall survive---for-the---period-. ---
necessary.
30. NON-WAIVER OF RIGHTS
The non-exercise or partial exercise by a Party of any of its rights under the terms of
tms agreement' sKall'nbt in any case constitute a waiver of thatlighC
31. SEVERABILITY
If any provision of this Agreement is or becomes illegal, invalid or unenforceable, in
whole or in part, the remaining provisions shall nevertheless remain valid and
subsisting and shall be construed as if this Agreement had been executed \......
illegal, invalid or unenforceable portion.
33
IN WITNESS WHEREOF, the Parlies have signed this Agreement, through their respective
duly authorized representatives, on the day, month and year indicated below.
SIGNED BY THE GOVERNMENT OF THE
REPUBLIC OF GHANA acting by
NK OSAH MILLS, the Minister of Lands
and Natural Resources who by this execution •v
Warrants to the other party that he is duly
Authorized and empowered to enter into this
Agreement in the presence of:
7^-02. Qf^yy^erC^’'-
$
SIGNED BY THE WITHIN-NAMED
NEWMONT GOLDEN RIDGE LIMITED by
JOHAN FERREIRA, its Managing Director
and Senior Vice President African Operations
who by this execution Warrants to the other
party that he is duly authorized and
empowered to enter into this Agreement in
34
I
*1
APPENDIX A
AJCYEM MINING LEASE
s ' '
THIS MlteG LEASE is made the ' day of '* 201jK
between THE GOVERNMENT OF THE REPUBLIC OF GHANA {liercina^cr/V;.^?^ '
called "the Government") acting by ALHAJI COLLINS DAUDA iffe1*-
Minister of Lands and Natural Resources (hereinafter called .* j
Minister") of the one part and NEWMONT GOLDEN RIDGE LIMIT )
having its registered office at 825/26, LAGOS STREET, EAST LEG(
ACCRA, PRIVATE MAIL BAG, AIRPORT POST OFFICE, ACCRA,
(hereinafter called “the Company") of the second part: ; - 1
WHEREAS: '
The Governmen t ^is ■.dtf§irQils-. of -developing its mineral resources in
manner as will ■ensiffel^^^te?|^3|n^n possible benefits accrue tb.r.
nation from -the^explp Ifemi^^siand. iiasviagrcc.dJ'to -grant
Company a >i --- '*
-------v yyiy
following: f .........
WflW THIS AGREEMENT fv *.•
«i ]L
1. ^tPamt of MINING RIGHTS ' A \W~
(a) The Government hereby grants to the Company mining rights'-to •
ALL that piece of land described in the schedule hereto and more
particularly delineated on the Plan attached and shown edged
(hereinafter called “the Lease Area”] together with mines,
seams, veins, channels and strata of gold lying and being
and under the surface for a term of fifteen (15) years from: the
of this Agreement. Such term shall be renewable from time to
in accordance with the Minerals and Mining Act, 2006, (Act 703).
(b) The Government hereby grants to the Company the exclusive^.,.
rights to work, develop and produce gold in the Lease Area.for tfcwf^^N
-said term-ef-fiftoen-i -(15) yeara-(ineludingrthe-preeessing,.'-faring---fash.
f \ * ' ♦ . A
and transportation of ore and materials together with thp sights _ ' i
and powers reasonably incidental thereto) subject to the pro$isi
of this Agreement; N<
■ \ •*
. V II
x vV ** •
r y i
(c) The Company shall nol, however, conduct any operations in a
sacred area and shall nol, without the prior consent in writing of
the Minister conduct any operations:
(i) within 50 yards of any building, installation, reservoir of dam,
public road, railway or area appropriated for railway;
(ii) in an area occupied by a market, burial ground cemetery or
Government office, or situated within a town or village or set
apart for, used, appropriated or dedicated to a public
purpose.
(d) (i) The Company shall complete the process of land acquisition,'
crop compensation and compensation or resettlement of
’ i project affected persons including residents, owners or
lawful occupiers of land within two years from, the date of .
l?tp;aQ^Rhase Oiie9)
(HI ofipPhase:
gc.a^|as|h.c,.C9nipany
il (iii) commence cbmtoeMgil-ipreaiSWn.titoiai^--..
t *•- *> (yt * * "•f*'.
In any event, Phase One and Phase iWo shrill not exceed 4
(iv) years.
■ \ The Company shall, during Phase One and Phase Two,
furnish an annual progress report to the Minister and thif'"
Chief Executive Officer of the Minerals Commissiori-:
summarizing relevant activities that have taken place in the
Lease Area during each Phase.
-d - (e) The Company shall conduct its operations in a manner consistent
with good commercial mining practices so as not to interfere
.j unreasonably with vegetation in the Lease Area or with the
-eustomary-rights-and-privilegee-ef-peFsons-tofannrhuttt-and-snare-
game, gather firewood for domestic purposes or to collect snails.
(f) The public shall be permitted at their sole risk to use without
charge, any road constructed by the Company in the Lease Area, in1
a manner consistent with good mining practices, safety, and
security, provided that such use does not unreasonably interfere
with the operations of the Company hereunder and provided also
that such permission shall not extend to areas enclosed for mining
operations.
(g) Nothing contained in this Agreement shall be deemed to confer any
rights on the Company conflicting with provisions contained in the
Minerals and Mining Act, 2006, (Act 703) or to permit the
Company to dispense with the necessity of applying for and
obtaining any permit or authorization which the Company may be
required'-'byalaw or regulation to obtain in respect of any work .or
activity^g^pO|e,d to be carried out hereunder.
NoWi>&tflfng' the above, the parties to this Agreement are also
parh^'s.'to^iylnii/estmt n,fcAg£egment dated 17th December 2003 and
Republic of Ghana on.v185jl .
Deceffibej that they have
of any difference between the terms of this Mining Lease and those
of the Investment Agreement, (including any amendment thereof),
the parties hereby agree that the terms of the Investment
Agreement (and as it may be amended) shall govern the rights and
the obligations of the parties.
2. GRANT OF RIGHTS TO THIRD PARTIES IN THE MINING AREA: -
(a) Subject to satisfactory arrangements between the Government and
the Company, the Government shall grant the first option to the
Company to work minerals other than gold and silver discovered in
th
(b) Failing such satisfactory arrangements between the Government
and the Company, the Government reserves the right to grant
licences to third parties to prospect for or to enter into agreements
* for the production of minerals other than gold and-silver in the
3
Lease Area, provided that any such activity .shall not unreasonably
interfere with the rights granted to the Company hereunder.
3. POWER OF GOVERNMENT TO EXCLUDE PARTS OF THE MINING
AREA:
(a) The Government may by reasonable notice in writing to the
Company exclude from the Lease Area, at any time and from time
to time, any part which may be required for any stated public
purpose whatsoever, provided that:
(i) The parts so excluded shall not have a surface area in the
aggregate greater than ten percent of the Lease Area.
(ii) Any parts of the Lease Area so excluded shall continue to
form part- oLthe-hease Area subject to this Agreement.
(iii) except, that-mcwmirn^ff-operations shall be conducted on the
(iv) No part of the Lease. Area shall be so excluded in respect of
which the Compafty^&il‘hav.e.j^r^nit.pripr_ notice specifying
that such part is required for irSMih^dpefations hereunder
or on which active operations have commenced or are in
progress (such as digging, construction, installation or other
works related to gold and silver mining) but, in lieu thereof, a
part equal in area to any such part shall be excluded for
such public purposes; and
(v) The Government shall not take to itself or grant to third
-parties "the right-termine-gold and~silver from any partrstr
excluded.
(b) The company shall be relieved of all liabilities or obligations
hereunder in respect of any part excluded under this paragraph
except liabilities or obligations accrued prior to such exclusion.
4. WORK OBLIGATION:
The Company shall continuously operate in the Lease Area in
accordance with good mining practices until such time as the
*• * , *
reserves or deposits may be exhausted or the mine can no longer
4
be economically worked or until this Agreement expires, whichever
shall be sooner.
5. CONDUCT OF OPERATIONS:
(a) The Company shall conduct all of its operations hereunder with
due diligence, efficiency, safely and economy, in accordance with
good mining practices and in a proper and workmanlike manner,
observing sound technical and engineering principles using
appropriate modem and effective equipment, machinery, materials
and methods, and pay particular regard to conservation of
resources, reclamation of land and environmental protection
generally^- *
(b) The Companyj siMll'ihiqe and extract ore in accordance with
» * «»• V *• ’
paragmph^5fg)^hdraia^tUMfl^metho;ds; which include dredging,
* •------------------
.... v.ri#; ........ ■ .. . .... . .
(c) The company shall maintairt^?gll;-^^pfrmfit' in good and ajlfc
condition, normal wear and tear e^clul^yvand > shall keep
excavated areas, shafts, pits and trenches in good and safe
condition and take all practical steps:-
(i) to prevent damage to adjoining farms and villages;
(ii) to avoid damage to trees, crops, buildings structures and
other property in the Lease Area; to the extent, however, that
any such damage is necessary or unavoidable, the Company
_____ shall pav fair and reasonable compensation. ___
(d) The Company shall fence off effectually from the adjoining
lands, all pits, shafts and other works made or used under the
powers hereof.
(e) The company shall as far as is necessary or practicable
provide and maintain in good repair and condition
roads, gates, stiles and fences for the convenient
occupation of the surface of the Lease Area.
5
(I) The Company shall provide and maintain proper and sufficient
drains, culverts, arches and passageways for carrying
off any waters which shall arise or be produced or
interrupted by any of the works hereby authorized so
that the drainage or the Lease Area may not be
prevented or prejudiced.
6. NOTIFICATION OP DISCOVERY OF OTHER MINERALS:
(a) The Company shall report forthwith to the Minister, the
Chief Executive Officer of the Minerals Commission, the
Chief Inspector of Mines, Inspectorate Division of the
. Minerals .Commission and the Director of Ghana Geological
discovery in the Lease Area of any other mineral
depositsvap,art; from gold and silver and the Company shall
nrospect further and to work Jjxe
said'inlin^als^u^j&d^^^aBa^tbiy arrangements between
the Government andlthcaQompany.
(b) Failing any such satisfaetp^^^tangements the Company
shall not produce any minerals from the Lease Area other
than gold and silver except where they are unavoidably
linked with the production of gold and silver.
7. SAMPLES:
(a) The Company shall not during the currency of this agreement
remove, dispose of or destroy,-except in analyses, any cores or
samples obtained from the Lease Area without the prior consent in
writing of the Head of the Inspectorate Division of the Minerals
Commission.
(b) The Company shall provide the Director of Ghana Geological
’ Survey with such" samples from'the Lease Area as he may irom
time to time reasonably request, and shall keep such samples as
he may be directed to do so by the Head of the Inspectorate
Division of the Minerals Commission.
8. ,- HEALTH. SAFETY AND ENVIRONMENTAL PROTECTION:
6
(a) The Company shall comply with all such reasonable instructions
as may from time to lime be given by the Inspectorate Division of
the Minerals Commission for securing the health and safety of
persons engaged in or connected with the operations hereunder.
The Company shall adopt all necessary and practical
precautionary measures to prevent undue pollution of rivers and
other potable water and to ensure that such pollution does not
cause harm or destruction to human or animal life or fresh water
fish or vegetation.
9. POWER OF CHIEF INSPECTOR OF MINES OF THE
ift&PEGTQRATEiflDMSION OF THE MINERALS COMMISSION TO
Ifith'e GomDdfite'I'fjkHtfafr.aiiv time fail to comnlv with any provisions
ci|||ledaw*and such failure is likely, ->in
of the Inspectorate
(ii) endanger the environment, or
(iii) cause harm or destruction to potable water; or
(iv) result in damage to mining equipment or other structures or
installation; the Head of the Inspectorate Division of the
Minerals Commission, shall after giving the Company
reasonable notice, execute any works which in his opinion
- are necessaiy-and practicable-in-the circumstanees-and the
costs and expenses of such works shall be borne by the
Company.
10. LIABILITY FOR DAMAGE OR INJURY AND INDEMNITY:
(a) Nothing in this Agreement shall exempt the Company from liability
for any damage, loss or injury caused to any person, property or
interest as a result of the exercise by the Company of any rights or
powers granted to it under this Agreement.
7
(b) The Company shall at all times indemnify die Government and its
officers and agents against all claims and liabilities in respect of
any loss suffered by or damage done to third parties arising out of
the exercise by the Company of any rights or powers granted to it
under this Agreement provided that the Company shall not so
indemnify the Government, its officers and agents where the claim
or liability arises out of the wrongful or negligent acts of the
Government, its officers and agents.
11. EMPLOYMENT AND TRAINING:
(a) Citizens of Ghana shall be given preference for employment by the
Company in all phases of its operations hereunder to the
mavifflnm possible extent, consistent with safety, efficiency and
economy.
(b) Except with respect to unskilled personnel, the Company may
employ non-Ghanaian personnel in the conduct of its operations
provided that the number of such non-Ghanaian personnel
employed shall not exceed the number permitted by applicable law.
(c) The Company shall provide appropriate programmes of instruction
and theoretical and practical training to ensure the advancement,
development, improved skills and qualification of Ghanaian
employees in all categories of employment.
12. PREFERENCE FOR GHANAIAN GOODS AND SERVICES
In the conducts its. operations and in the purchase, construction
_and installation.oLfaciHties, the-Company- shall-give-pceferenco to:--
(a) materials and products made in Ghana, if such materials and
products are comparable or better in price, quality and delivery
dates than materials and products from foreign sources;
(b) service agencies located in Ghana owned by Ghanaian citizens or
companies organized pursuant to Ghanaian law, including but not
limited to, insurance agencies, bidding contractors, import brokers,
dealers and agents if such agencies give or provide equal or better price
8
and qualiLy of service than competing foreign firms and can render
services at such times as the Company may require.
13. AFFILIATED COMPANY TRANSACTIONS:
(a) Any services including services in respect of the purchase and
acquisition of materials outside Ghana provided by an affiliated
company shall be obtained only at a price, which is fair and
reasonable. The Company shall, at the request of the Minister,
provide such justification of costs as may be required, duly
supported by an Auditor’s certificate if necessary.
(b) Any other transactions between the Company and an affiliated
company.shall be on the basis of competitive international prices
and upon .such terms and conditions as would be fair and
■ ' /
reasonable «h1ad such transactions taken place between unrelated
P&Tll6Srf f'l‘k' *5 * I . »
(c) The Company, shall:,potify^|M.^ter of any and all transactions
between the Company and an affiliated company and shall supply
such details relating to such transactions as the Minister may by
notice reasonably require.
14. TECHNICAL RECORDS:
(a) The Company shall maintain at its registered or mine offices
complete records of pits and trenches (location, depths of
overburden and gravel and assay value) in the Lease Area in such
form as may from time to time be approved by the Chief Inspector
of Mines of the Inspectorate Division of the Minerals Commission,
Chief Executive Officer of the Minerals Commission and the
Director of Ghana Geological Survey.
(b) The Company shall maintain at the said offices copies of all reports
--including-interpretations dealing'wiLhrgoid and-silver-prospects in-
the Lease Area in the course of its operations hereunder and copies
of all tests and analyses, geological and geophysical maps,
diagrams or charts relevant to its operations hereunder. These
reports and records may be examined by persons in the service or
9
acting on behalf of the Government and authorteed in writing by
the Minister.
(C) The Company shall maintain at the said offices correct and
intelligible plans and sections of all mines which plans and
sections shall show the operations and workings which have been
carried on as well as dykes, veins, faults and other disturbances
which have been encountered in such workings and operations.
All such plans and sections shall be made, amended and
completed from actual surveys conducted for that purpose.
(d) Upon expiration or termination of this Agreement or the surrender
of any part of the Lease Area, such records and data as are
required to be maintained pursuant to this paragraph which relate
to the Lease- Areaj or such part of the Lease Area as may have been
surrendered
the Insp ectorate1^ cthe Minerals Commission, Chief.. s
Executive Officer of the Minerals Commission and the Director of
Ghana Geological Survey arid shall become the property of the
Government without charge.
15. PRODUCTION RECORDS:
The Company shall maintain at its registered or mine offices
complete and accurate technical records of its operations and
production in the Lease Area in such form as may from time to
time be approved by the Chief Inspector of Mines of the
Inspectorate Division of the Minerals Commission.
16. FINANCIAL RECORDS:
(a) The Company shall maintain at its registered or mine offices,
detailed and complete accounts and systematic financial records of
■ke-operations as-may-be-requtfed-by-law»---The books of account
shall show all revenues received by the Company from all sources
including its operations hereunder, as well as all its expenditure.
10
The Company shall provide for a clear basis for understanding
and relating the financial records and accounts to its
operations.
(b) The Company’s books of account shall be kept on the basis of
generally accepted accounting principles.
(c) The Company shall keep separately records and financial
statements in terms of Ghana currency and also in terms of
U.S. Dollars or other international currency and may record in
foreign currency such claims and liabilities as arise in such
foreign currency.
(d) The Company’s books of account shall be audited within six (6)
ni'odths after the close of each Financial Year by a qualified
Accountant and jineraber of the Ghana Institute of Chartered
Accountants. Such^audlfing shall not in any way imply
acee'p’fahce: Government or preclude the
Government froiri ''atslllMg^sUch books of account. The
Company shall deliver to-&ie£
Minister without charge, copies of all or 'any part of such
financial records as he may from time to time reasonably
request.
17. REPORTS:
(a) The Company shall furnish a report each quarter, to the Minister,
the Chief Inspector of Mines of the Inspectorate Division of the
Minerals Commission, the Chief Executive Officer of the Minerals
--- Commission and the Director of~Ghana Geological-Survey, in such-
forms as may from time to time be approved by the Minister,
regarding the quantities of gold and silver won in that quarter,
__quantities sold, the revenue received and royalties payable for that
quarter and such other information as may be required. Such
reports shall be submitted not later than thirty (30) days after the
end of each quarter.
li
(b) The Company shall furnish a report each half-year to the Minister,
the Chief Inspector of Mines of the Inspectorate Division, Minerals
Commission, the Chief Executive Officer of the Minerals Commission and
the Director of Ghana Geological Survey in such form as may from time
to time be approved by the Minister summarising the results of its
operations in the Lease Area during the half-year and records to be kept
by the Company pursuant to paragraphs 14, 15 and 16 hereof. Each
such report shall include a description of any geological or geophysical
work carried out by the Company in that half-year and a plan upon a
scale approved by the Head of the Inspectorate Division of the Minerals
Conmussion^owing. dredging areas and mine workings. Such reports
shall be submitted "not later than forty (40) days after the half-year to
which they relate,.. .
(c) iuinish a report each Financial Year-iri
be approved by«'&
Minister to. the .Chief Inspeoton.ofvMines of the Inspectorate
Division of the Minerals-£dihlm]if^0gi the Chief Executive
Officer of the Minerals Commission and the Director of
Ghana Geological Survey Department summarising die
results of its operations in the Lease Area during that
Financial Year and the records required to be kept by tlje
Company pursuant to paragraphs 14, 15, and 16 hereof.
Each such report shall include a description of the proposed
operations for the following year with an estimate of the
--- production and revenue to be obtained therefrom. ~3ucE"
reports shall be submitted not later than sixty (60) days after
the end of each Financial Year.
____(d) The Company shall fnmifih the Minister.-the ChleLln.spenfn
of Mines of the Inspectorate Division of the Minerals
Commission, the Chief Executive Officer of the Minerals
. Commission and the Director of Ghana Geological Survey
not later than three (3) months after the expiration or
12
termination of this Agreement, with a report giving an
account of the geology of the Lease Area inciuding the
stratigraphic and structural conditions, together with a
geological map on a scale prescribed in the Mining
Regulations.
(c) The Company shall furnish the Minister and the Chief
Executive Officer of the Minerals Commission, with a report
of the particulars of any proposed alteration to its
regulations. The Company shall also furnish the Minister
and the Chief Executive Officer of the Minerals Commission
with a report on the particulars of any fresh issues of shares
of. its capital stock or borrowings in excess of an amount
equivalent to the Stated Capital of the Company. All such
■'■*4iprtS in such form as the Minister may require
shall be submitted not less than- twenty-one (21) days
(or such lesser period as the Minister may agree) in advance
of. any proposed alteration, fresh issue or borrowing, as the
case may be.
(f) The Company shall, not later than 180 days after the end of
each Financial Year, furnish the Minister and the Chief
Executive of the Minerals Commission with a copy each of its
annual .financial reports including a balance sheet, profit
and loss account, and all notes pertaining thereto, duly
certified by a qualified accountant who is a member of the
Qhana Institute of Chartered Accountants. Such certificate
shall not in any way imply acceptance of such reports by the
Government or preclude the Government from auditing the
Company’s books of account.' ’ '
(g) The Company shall furnish the Minister, the Chief Inspector
of Mines of the Inspectorate Division of the Minerals
Commission, the Chief Executive Officer of the Minerals
Commission and the Director of Ghana Geological Survey
13
1
I
with such other reports and information concerning its
operations as they may from time to time reasonably require.
18. INSPECTION:
(a) Any person or persons in the service of or acting on behalf of
the Government and authorized in writing by the Minister
shall be entitled at all reasonable times to enter into and
upon any part of the Lease Area and the Company's
registered office, for any of the following purposes:
(i) to examine the mine workings, equipment, buildings,
installation and any other structures used in the
mining operation;
. (ii) to inspect the samples which the Company is required
to keep in accordance with the provisions of this
• - Agreement;
Uii) to inspect and.check the accuracy of the weights and
.pleasures and weighing and measuring devices, used
or kept by the Company;
(iv) to examine and make abstracts of the books and
records kept by the Company pursuant to this
Agreement;
(v) to verify:dr*fsnsure compliance by the Company with all
» -In- '
. J applicable latfs and regulations and with its
J- obligati'pci^i^^er;
--(vi)-to-execute' any-works which-the---Chief Inspector-of-
Mines of the Inspectorate Division of the Minerals
Commission may be entitled to execute in accordance
with the provisions of the Mining Laws and
Regulations of Ghana, or of this Agreement.
(b) The Company shall make reasonable arrangements to
facilitate any such work or inspection, including making
available employees of the Company to render assistance
with respect to any such work ’or inspection. All such works
\A
and inspections shall be listed by the Company in the
reports and furnished each half year.
19. CONFIDENTIAL TREATMENT:
The Government shall treat all information supplied by the
Company hereunder as confidential for a period of five (5) years
from the date of submission of such information or upon
termination of this Agreement whichever is sooner and shall not
reveal such information to third parties except with the written
consent of the Company which consent shall not be unreasonably
withheld. The Government and persons' authorized by the
Government may nevertheless use such information received from
the Company for the purpose of preparing and publishing genera]
reports on Minerals in Ghana and in connection with any dispute
between .the Government and the Company.
20. FINANCIAL QBIflG7£PJQfi& “
(a) Consideration Fees
The Company shall, in consideration of the grant of the
Mining Lease pay to Government an amount of
US$30,000.00 (thirty thousand U.S. Dollars).
The Company shall pay rent (which shall be subject to
review) at the rate of GH
pesewas) j.e. 50Gp per square kilometre)
ji) the said rent shall be paid half yearly in advance on or
before the first day of January and on or before the
first day of July in each year.
(ii) in the event of a surrender of any part of the Lease
AreaT pursuant to paragraph 25 "hereof, no rental
payments shall be refunded in whole or in part of any
area so surrendered for which yearly rental has been
paid in advance or shall rental payments be refunded
•in the event of termination.
15
21. ROYALTIES:
(a) The Company shall pay lo the Government royally as
prescribed by the legislation.
(b) The Company shall pay royally to the Government each
quarter through the Commissioner of Internal Revenue
based on the. production for that quarter, within thirty (30)
days from the end of the quarter.
Any necessary adjustments shall be made annually within
sixty (60) days of the end of each Financial Year, except that
any* over-payment of royalty shall not be refunded by the
Government but shall be credited against royalty due and
payable in the next quarter.
(c) In the event of a dispute with respect to the amount of
royalty payable hereunder, the Company shall first make
payment ;of the lower of the disputed amounts and shall pay
forthwith any further royalty which shall be agreed upon or
determined to be payable by arbitration in accordance with
paragraph 35 hereof. Such further royalty shall cany
interest to be agreed upon or at the ruling prime rate in
Ghana at the time of the award or agreement to take effect
from the date on which such amount ought originally to have
been paid.
(d) The Company shall also pay royalty on all timber felled by
the Company in accordance with existing legislation.
22. LATE PAYMENTS:
(a) Anything herein contained to the contrary notwithstanding,
the Company shall, subject to the laws of Ghana, pay as
-penalty -fer-any---late payraent-of-any- amounts-due-to-the
Government hereunder, an additional amount calculated at
the Bank of Ghana re-discount rate for eveiy thirty-day
period or part thereof for the period of the delay in paying
the amounts, that is to say, the period between the actual
16
/• /•
payment date and the date on which each such payment
should have been made.
(b) In the event the Company shall fail to make payment to the
Government of any amount due hereunder, the Government
without prejudice to any other rights and remedies to which
it may be entitled, may, after giving 30 days notice in writing,
enter into and upon the Lease Area and seize and distrain
and sell as landlords may do for rent in arrears, all or any of
the stocks of gold and silver produced therefrom, and the
plant and equipment, materials and supplies belonging to
'the Company which shall be thereon; and out of the monies
obtained from the sale in respect of such distress may retain
an'd. pay all of the arrears of any amounts due hereunder and
t
ffiPfep'sts aJid -expgn^eS' Incidental to any such distress and
side'arid deliver^' tfp'^h’d'siirplus (if any) to the Company.
23. TAXATION:
(a) The Company shall not be required to deduct or withhold
any taxes from any payment made from its external account
of which is authorized under the terms of the Minerals and
Mining Act, 2006 (Act 703) of:
(i) any interest or other costs or fees paid in respect of
any
borrowing by or on behalf of the company in foreign
---currency-for-the project;---------- -
(ii) any dividends paid to the shareholders.
(b) Save for the above, the Company shall pay tax in accordance
with the laws of Ghana.
24. FOREIGN EXCHANGE:
All foreign exchange transactions shall be in accordance with the
laws of Ghana.
25. SURRENDER:
17
(a) The Company may surrender at any time and from lime to
time, by giving not less than two months’ notice to the
Minister, all its rights hereunder in respect of any part of the
Lease Area not larger in the aggregate than 20% of the said
Area. The Company may surrender a larger part of the Lease
Area by giving not less than twelve (12) months’ notice to the
Minister. The Company shall be relieved of all obligations in
respect of the part or parts of the Lease Area so surrendered
except those obligations, which accrued prior to the effective
date of surrender.
(b) The Company shall leave die part of the Lease Area
surrendered
and everything thereon in a good and safe condition,
provided, however that the Company shall have no such
obligations for areas surrendered on which the company has
not undertaken any works or which have not been affected
by the operations of the Company. The Company shall take
all reasonable measures, in accordance with good mining
practices to leave the surface of such part of the Lease Area
surrendered, in good and usable condition having regard to
the ecology, drainage, reclamation and the protection of the
environment. In the event that the Company fails to do so,
the Minister shall make such part and evexything thereon
safe and in good, usable condition at the expense of the
Company. The provisions of sub-paragraphs (a) and (c) of
paragraph 29 hereof shall apply.
(c) The Company shall, on such terms and conditions as may be
-agrecd-upoir-betwecn the-Govemment-and the-Gompanyrbe-
entitled to such wayleaves, easements or other rights
through or across the surrendered part or parts as may be
necessary for its operations and such wayleaves shall not
18
r r /• f
form part or be included in the calculation of the area of the
retained part.
(c) The Government may require that there be reserved over any
part surrendered such wayleaves, easements or other rights
as will in its opinion be necessary or convenient to any party
to whom the Government may subsequently grant a
prospecting licence or mining lease.
26. EXTENSION:
If the Company, not less than six (6) months before the expiration
of this Agreement, applies to the Minister for an extension of the
term hereof and if the Company shall not be in default at that time
in the performance of any of its obligations hereunder, the
Company shall be entitled to an extension of the period of this
Agreement upon such terms and conditions as the parties may
then agree.
27. COMPANY'S RIGHT TO TERMINATE AGREEMENT:
The Company may, if in its opinion the mine can no longer be
economically worked, terminate this Agreement by giving not less
than nine (9) months’ notice to the Government. Such termination
shall be without prejudice to any obligation or liability incurred by
the Company hereunder prior to the effective date of such
termination.
28. GOVERNMENT’S RIGHT TO TERMINATE AGREEMENT:
-(a) ---The-Govemment may,---subject to^ the provisions pf this.
paragraph terminate this Agreement if any of the following
events shall occur:-
(i) the Company shall fail to make any of the payments
provided for in this Agreement on the payment date;
(ii) the Company shall contravene or fail to comply with
any other provisions of this Agreement; or
(iii) the Company shall become insolvent or bankrupt or
enter into * any agreement or composition with its
IP
creditors or take advantage of any law for the benefit of
debtors or go into liquidation, whether compulsory or
voluntary, except for the purposes of reconstruction or
amalgamation; or
(iv) the Company makes a written statement to the
Government on any material matter in connection with
this Agreement or with its operations which the
Company knows to be false or makes recklessly
without due regard as to whether it was true or false.
(b) If and whenever the Government decides there are grounds
to terminate this Agreement pursuant to clauses (i) and (ii) of
the preceding sub-paragraph, the Government shall give the
Company notice specifying the particular contravention or
failure and permit the Company to remedy same within one
hundred and twenty (120) days of such notice, or such
longer period as the Minister may specify in such notice as
being reasonable in the circumstances.
(c) If the Company shall fail to remedy any event specified in
clauses and (ii) of sub-paragraph (a) of this paragraph within
the stated period, or an event specified in clauses (iii) and (iv)
of the said sub-paragraph shall occur, the Government may
by notice to the Company terminate this Agreement,
provided that if the Company disputes whether there has
been any contravention or failure to comply with ther
conditions hereof (including any dispute as to the calculation
of payments by the Company to the Government hereunder),
__anH fhp Pnmpany shall, within such period as aforesaid refer
die dispute to arbitration in accordance with paragraph 35
hereof and, thereafter, diligently prosecute its claim
thereunder, the Government shall not terminate this
Agreement except as the same may be consistent with the
terms of the arbitration award.
20
(d) No delay or omission or course of dealing by the Government
shall impair any of its rights hereunder or be construed to be
a waiver of any event specified in sub-paragraph (a) of this
paragraph or an acquiescence therein.
(e) Upon termination of this Agreement, every right of the
Company
hereunder shall cease (save as otherwise specifically
provided hereunder) but subject nevertheless and without
prejudice to any obligation or liability imposed or incurred
under this' Agreement prior to the effective date of
termination and to such rights as the Government may have
under the law.
29. ASSETS ON TERMINATION OR EXPIRATION:
(a) The Company may within six months of the termination of
the Mining Lease or a further period allowed by the Minister,
remove the mining plant if the mining plant is removed solely
for the purpose of use by the Company or a person deriving
title through the Company, in another relevant mining
activity in the Country.
(b) A mining plant not removed by the Company within two
months after notice is given by the Minister to the Company
at anytime after expiration of the period referred to in
subsection (a), shall vest in the Republic on the expiration of
the two month notice period.
(c) Nothing in tEis Agreement removes or “diminishes "an
obligation that the Company may have under the Minerals
and Mining Act, 2006, (Act 703), another enactment or a
--conditien-of-this Agreement- fn remove a mining plant gnd _
rehabilitate the land.
(d) Notwithstanding the foregoing, the Minister, may by notice to
the Company require the removal or destruction of any
assets of the Company in the Leased Area, and if the
21
'-j
Company docs not remove or destroy sucli assets within a
period of thirty (30) days from, the date of the Minister's
*' notice to that effect, the Minister shall cause such removal or
destruction at the expense of the Company.
(e) The Company shall take all reasonable measures to ensure
that all of the assets to be offered for sale to the Government
or transferred to the Government in accordance with this
paragraph shall be maintained in substantially the same
condition in which they were at the date of the termination,
or the date on which the Company reasonably knew that
such termination would occur and any such assets shall not
J be disposed of, dismantled or destroyed except as specifically
provided for in this paragraph.
(1) Upon the termination or expiration of this Agreement, the
Company shall leave the Lease Area and everything thereon
in good condition, having regard to the ecology, drainage,
reclamation, environmental protection, health and safety;
provided however that the Company shall have no obligation
in respect of areas where the Company has not undertaken
any work or which have not been affected by the Company's
operations. In this connection, unless the Chief Inspector of
Mines otherwise directs, the Company shall, in accordance
with good mining practices, fill up or fence and make safe all
Holes and excavations to“th5T5asonable-satisfucliun' of- the-
J Chief Inspector of Mines. In addition the Company shall
take all reasonable measures to leave the surface of the
__Lease Area in usable condition and to restore all structures
thereon not the property of the Company to their original
condition. In the event that the Company fails to do so, the
Minister shall restore and make safe the Lease Area and
everything thereon at the expense of the Company.
22
(g) The Company shall have the right to enter upon the Lease
Area for the aforesaid purposes, subject to the rights of
surface owners or others, for a period of six (6) months from
the effective date of the termination or such longer period as
the Minister may decide.
(h) On the termination of this Agreement, the Company shall
deliver to the Minister the records which the Company is
obliged to maintain under the Minerals and Mining Act,
2006, (Act 703); the plans and maps of the area covered by
the mining lease prepared by the Company; and other
documents, including in electronic format, if available that
relate to the mineral right.
30. FORCS MAJEURE:
(a) For the purpose of this paragraph, force majeure includes
acts of God,: war, strikes, insurrection, riots, earthquakes,
storm, flood or other adverse weather conditions or any other
event which the Company could not reasonably be expected
to prevent or control, but shall not include any event caused
by a failure to observe good mining practices or by the
negligence of the Company or airy of its employees or
contractors.
(b) The Company shall notify the Minister within forty-eight (48)
hours of any event of force majeure afTecting its ability to
fulfil the conditions hereof or of any events, which' may
endanger the natural resources of Ghana and similarly notify
the Government of the restoration of normal conditions
within forty-eight hours of such restoration. This provision
---ShafTbe in- addition lo any requirements-contained-m-the---
Mining Regulations in force in Ghana.
(C) All obligations on the part of the Company to comply with
any of the conditions herein (except the obligation to make
payment of monies due to the Government) shall be
23
suspended during the period the Company is prevented by
force majeure from fulfilling such obligations, the Company
having taken all reasonable precautions, due care and
reasonable alternative measures with the objective of
avoiding such non-compliance and of cariying out its
obligations hereunder. The Company shall take all
reasonable steps to remove such causes of the inability to
fulfil the terms and conditions hereof with the minimum of
delay.
(d) The terms of this Agreement shall be extended for a period of
time equal to the period or periods during which the
company was affected by conditions set forth in the sub-
paragraph (a) and (b) of this paragraph or for such period as
may be agreed by the parties.
POLITICAL ACTIVITY:
The Company shall not engage In political activity of any kind in
Ghana or make a donation, gift or grant to any political party. The
Company shall malm it a condition of employment that no
employee, other than a citizen of Ghana shall engage in political
activity and shall not make donations, gilts or grants to any
political party. In the event of any such employee acting in
disregard to this condition, he shall be dismissed forthwith.
ADVERTISEMENTS. PROSPECTUSES. ETC:
Neither the Company nor any affiliated Company shalh-in---any-
manner ntaim or suggest, whether expressly or by implication that
the Government or any agency or official thereof, has expressed
any opinion with respect to gold in the Lease Area and no
statement to this effect shall be included in or endorsed on any
prospectus notice, circular, advertisement, press release or similar
document issued by the Company or any affiliated Company for
the purpose of raising new capital.
CO-OPERATrON OP THE PARTIES:
24
Each of Lhc parties hereto undertake that it will from lime to time
do all such acts and make, enter into, execute, acknowledge and
deliver at the request of the other party, such supplemental or
additional instruments, documents, agreements, consents,
information or otherwise as may be reasonably required for the
purpose of implementing or further assuring the rights and
obligations of the other party under this Agreement.
34. NOTICE:
Any application, notice, consent, approval, direction, instruction or
waiver hereunder shall be in writing and shall be delivered by hand
or by registered mail. Delivery by hand shall be deemed to be
effective from the time of delivery and delivery by registered mail
shall be deemed to be effective from such time as it would in the
ordinary course of registered mail be delivered to the addressee.
35. ARBITRATION AND SETTLEMENT OF DISPUTES:
(a) Any dispute between the parties in respect of the
interpretation or enforcement of the provisions of this
document shall be settled in accordance with the procedures
available in Ghana for the settlement of such dispute
provided that at the instance of either of the parties any
such dispute may be submitted for settlement by arbitration
under the Arbitration Rule of the United Nations
Commission on International Trade Law (the “UNCITRAL
_ Rule”!.__. ____ __
(b) Any arbitration under the UNCITRAL Rules shall be by three
(3) arbitrators unless the parties agree to a single arbitrator.
The place of arbitration shall be Accra and the proceedings
shall be in English unless the parties otherwise agree.
Ghana Law shall be the law applicable to the proceedings.
(c) Nothing in clause 35(a) or 35(b) shall prevent either of the
parties from requesting any judicial authority to order
provisional’ measures prior to1 the initiation of'arbitration
25
proceedings or during the proceedings for the preservation of
their respective rights.
(d) The parties acknowledge and that this Agreement was made
on the basis of the laws and conditions prevailing at the date
of the effective conclusions of the negotiation of this
Agreement and accordingly, if thereafter, new laws and
conditions come into existence which unfairly affect the
interest of either parly to this Agreement, then the party so
/
unfairly affected shall be entitled to request a re-negotiation
and the parties shall thereupon re-negotiate. *
The parties hereby undertake and covenant with each other
to make every effort to agree, co-operate, negotiate and to
take such action as may be necessary to remove the causes
of unfairness or disputes.
36 ASSIGNMENT AND TRANSFER OF RIGHTS:
(a) This Agreement shall not be assignable in whole or in part by
the Company without the prior consent in writing of the
Government
(b) The Government may impose such conditions precedent to
the giving of such consent as it may deem appropriate in the
circumstances. No assignment, however, may relieve the
Company of its obligations under this Agreement except to
the extent that such obligations are actually assumed by the
Assignee.
(c) During the term of this Agreement, no shares of the capital
stock of the Company may be transferred except in
accordance with the Minerals and Mining Law.
37. ---HEADINGS:--------------------
The headings given to paragraphs in this Agreement are for
convenience only and shall not affect the construction or
interpretation of this Agreement.
38. ■ GOVERNING LAWS:
26
This Agreement shall be governed and construed in accordance
with the Laws of Ghana. *
■ s
r
In
t
l
27
t
I
THIS IS THE PLAN
IN THE ANNEXED MINING
DATED THIS
THE. HON. MINIST.
THE SCHEDULE ABOVE REFERRED TO
!
All that piece or parcel of land containing an approximate total area of P
46.40 square kilometers Lying to the North of Latitudes 6°17,57",
6°18"47,’I 6°19’10n, 6°19’55”, and 6°17’56”; South of 4
Latitudes 6°18*27”, 6021*32" and 6°22’48”; East of Longitudes -1°01'04”, -
1°00’49”, -I® 01*08”, -1° 01*08", -1° 01*05”, -JL° 03*35”, -1° 03*17”, and -
1003*13”; West of Longitudes -1°00’00”, -1° 01*35”, and -1002*35*’. in the \
\
Birim North District of the Eastern Region of the Republic of Ghana }.
which piece or parcel of land is more particularly delineated on the plan V
annexed hereto for the purposes of identification and not of limitation.
•»
i .
#*
i
28
4
r
IN WITNESS OF WHICH the Parties have respectively executed the
original and counterpart of this Agreement on the date first above
written.
SIGNED BY THE GOVERNMENT OF THE ]
REPUBLIC OF GHANA acting by ]
ALHAJI COLLINS DAUDA, the Minister ]
of Lands and Natural Resources who by ]
this execution warrants to the other parly j
that she is duly authorized and empowered}
enter into this Agreement in the presence J HON. MINISTER
MIN. OF LANDS 6 NATURAL
• of; ] RESOURCES
P. 0. BOX M8 212. ACCRA
SIGNED BY THE WITHIN-NAMED j
NEWMONT GOLDEN RIDGE LIMITED ]
acting by its Chief Executive/Managing ]
Director who by this execution warrants ]
to the other party that he is duly ]
authorized antfempowered' to enterinta---]
this Agreement in the presence of; J
29
v .
OATH OF PROOF
l, . * ' { of ACCRA make oath and
say that on the . day of - * 2010 I was present and
saw ALHAJ2 COLLINS DAUDA, Minister of Lands and Natural Resources
duly execute the Instrument now produced to me and marked “A” and
that the said ALHAJI COLLINS^DAUDA can read a^id write.
SWORN at Accra, this 2010
BEFORE ME *
REGJg; D EPONENT
This ia^fiistrument Marked “A” Referred toin the Oath
Sworn before me this foM* day of 2010
REGI
certificIteof proof
On. the /^day of f^yUJ^ 2010 at to8$\O'clock in the
noon this Instrument was proved before me by the Oath of the within*
named ..
to have been duly executed by the within-named ALHAJI COLUNS
DAUDA for and on behalf of “the Government" of the Republic of Ghana
for Lessor herein.
1
(TgSGISTRX
r?c^nn5SS5
day of 2010
.GOVERNMENT OF THE REPUBLIC OF GHANA
AND
; ;
NEWMONT GOLDEN RIDGE LIMITED
MINING LEASE
: FIFTEEN (15) TEARS
COMMENCEMENT , i&iajSnaSur
i
espiry date
--- L
FILE NO
'SOLICITOR OF-THB“SUPREME-e©URT-
GHANA
3)
^ css l'
^ I '■= r
/' ;/t#
✓
•■ /: «
THIS<$nNII«r£EASE is made the dav of 2°JO •
between THE GOVERNMENT OP THE REPUBLIC OF GHANA (hcrctnap£r . tp% jjp ;-
called "the Government”) acting by ALHAJI COLLINS DAUDA
Minister of Linds and Natural Resources (hereinafter called Ins'"..' *//
. V'' 'i, ~ • /
Minister”) of the one part and NEWMONT GOLDEN RIDGE LIMITED,
having its registered office at 825/26, LAGOS STREET, EAST LEGON,
ACCRA, PRIVATE MAIL BAG, AIRPORT POST OFFICE, ACCRA, GHANA ‘
(hereinafter called “die Company”) of the second pari: £' •
WHEREAS: *
l
. ♦
The Government is desirous of developing its mineral resources in su.Ch
manner as will ensure that the maximum possible benefits accrue to t.he . /
nation from the exploitation of minerals and has agreed to grant the^ ^'■ A
Company a Mining Lease on the terms and conditions hereinafter A
following: ^
NOW THIS AGREEMENT WITNESSETH THAT:
i. GRANT OF MINING RIGHTS r'
(a) The Government hereby grants to the Company mining rights to
ALL that piece of land described in the schedule hereto and mote
particularly delineated on the Plan attached and shown edged
(hereinafter called “the Lease Area”) together with mines,
seams, veins, channels and strata of gold lying and being
and under the surface for a terra of fifteen (15) years from the
of this Agreement. Such term shall be renewable from tiipj^to
in accordanee-with- the Minerals-andMining-Aotj-2006,-(Act 7031
(b) The Government hereby grants to the Company the exclus^p
. i •-
rights to work, develop and produce gold in the Lease Area for the -..
said term of fifteen (15) years (including, the processing, storing Mr
and transportation of ore and materials together with the rights ' ./
and powers reasonably incidental thereto) subject to the provisions ” ^
of this Agreement; .. >
•I •
v.
1
(C) The Company shall mil. however, conduct any operations in a
sacred urea and shall not, without the prior consent in writing of
the Minister conduct any operations:
(i) within 50 yards of any building, installation, reservoir of dam,
public road, railway or area appropriated for railway;
(ii) in an area occupied by a market, burial ground cemetery or
Government office, or situated within a town or village or seL
apart for, used, appropriated or dedicated to a public
purpose.
(d) (i) The Company shall complete the process of land acquisition,
crop compensation and compensation or resettlement of
project affected persons including residents, owners or
lawful occupiers of land within two years from the date of
this Mining Lease (hereinafter referred to as “Phase One").
(ii) Within two years after the completion of Phase One
(hereinafter referred to as “Phase Two”), the Company shall
commence commercial production of gold.
(iii) In any event, Phase One and Phase Two shall not exceed 4
years.
(iv) The Company shall, 'during Phase One and Phase Two,
furnish an annual progress report to the Minister and the
Chief Executive Officer of the Minerals Commission
summarizing relevant activities that have taken place in the
_Lease Area during each Phase.
(e) The Company shall conduct its operations in a manner consistent
with good commercial mining practices so as not to interfere
unreasonably with vegetation in the Lease Area or with the
customary rights and privileges ofpersons-to farm, huafe-and-snarc---
game, gather firewood for domestic purposes or to collect snails.
(f) The public shall be permitted at their sole risk to use without
charge, any road constructed by the Company in the Lease Area, in
a manner- consistent with .good mining practices, safety and
2
ftt'curiiv, pinvidrd that sufh use does not unreasonably interfere
with Mir u|i<‘tiiiitin:; of the Company hereunder and provided also
that such jj«*i mission shall not extend to areas enclosed for mining
operations
(g) Nothing rimiaiiirtl in this Agreement shall be deemed to confer any
rights «m lh<* Company conflicting with provisions contained in the
Mineral:; and Mining Act, 2006, (Act 703) or to permit the
Company in dispense with the necessity of applying for and
obtaining any permit or authorization which the Company may be
required by law or regulation to obtain in respect of any work or
activity proposed to be earned out hereunder.
Notwithstanding the above, the parties to this Agreement are also
parties to an Investment Agreement dated 17th December 2003 and
ratified by the Parliament of the Republic of Ghana on 18th
December 2003. The parties acknowledge that they have agreed to
review and possibly amend certain aspects of the Investment
Agreement. Therefore, forthe avoidance of any doubt, in the event
of any difference between the terms of this Mining Lease and those
of the Investment Agreement, (including any amendment thereof),
the parlies hereby agree that the terms of the Investment
Agreement (and as it may be amended) shall govern the rights and
the obligations of the parties.
2. GRANT (JK KIOl ITS TO THIRD PARTIES IN THE MINING AREA:
" (a) Subject id'HnllsfflCtory arrangements~fcretween the Goverrrment-and-
the Company, the Government shall grant the first option to the
Company to work minerals other than gold and silver discovered in
___the Lease;. Area.________
(b) Failing such .satisfactory arrangements between the Government
and Die Company, the Government reserves the right to grant
licences to third parlies to prospect for or to enter into agreements
for the proditeiiim of minerals other than gold and silver in the
’ 3
Lease Aren, provided it ml any such activity shall not unreasonably
interfere will* i Jit* rights granted to the Company hereunder.
3. POWER OK GOVERNMENT TO EXCLUDE PARTS OP THE MINING
AREA:
(a) The Government may by reasonable notice in writing to the
Company exclude from the Lease Area, at any time and from time
{g time, nnv part which may be required for any stated public
purpose whatsoever, provided that:
(i) The ports so excluded shall not have a surface area in the
aggregate greater than ten percent of the Lease Area.
(ii) Any parts of die Lease Area so excluded shall continue to
form part of the Lease Area subject to this Agreement.
\ (iii) except that no mining operations shall be conducted on the
parts so excluded.
I (iv) No part of the Lease Area shall be so excluded in respect of
which the Company shall have given prior notice specifying
that such part is required for mining operations hereunder
t
or on which active operations have commenced or are in
progress (such as digging, construction, installation or other
works related to gold and silver mining) but, in lieu thereof, a
I purl, equal in area to any such part shall be excluded for
such public purposes; and
(v) The Government shall not take to itself or grant to third
parties the right to mine gold and silver from any part so
excluded. -
(b) The company shall be relieved of all liabilities or obligations
hereunder in respect of any part excluded under this paragraph
-excepLUubililics ^obligations accrued prior to such exclusion.
4. WORK OR LI OAT! <
The Company shall continuously operate in the Lease Area in
accordance with good mining practices until such time as the
reserves or dcpusils may lx* exhausted or the mine can no longer
4 ‘
bo economically worked or unlil this Agreement expires, whichever
shall be sooner.
5. CONDUCT OF* OPERATIONS:
(a) The Company shall conduct all of its operations hereunder wiLh
due diligence, efficiency, safety and economy, in accordance with
good mining practices and in a proper and workmanlike manner,
observing sound technical and engineering principles using
appropriate modern and effective equipment, machineiy, materials
and methods, and pay particular regard to conservation of
resources, reclamation of land and environmental protection
generally.
(b) The Company shall mine and extract ore in accordance with
paragraph 5(a) herein utilizing methods, which include dredging,
quanying, pitting, trenching; stopping and shaft sinking in the
Lease Area.
(c) The company shall maintain all equipment in good and safe
condition, normal wear and tear excluded, and shall keep all
excavated areas, shafts, pits and trenches in good and safe
condition and take all practical steps:-
(i) to prevent damage to adjoining farms and villages;
(ii) to avoid damage to trees, crops, buildings structures and
other property in the Lease Area; to the extent, however, that
any such damage is necessary or unavoidable, the Company
shall pay fair and reasonable compensation.
(d) The Company shall fence off effectually from the adjoining
lands, all pits, shafts and other works made or used under
the powers hereof.
--- (e)--The- company---shall---as far as---is---necessaiy- or---practicable---
provide and maintain in good repair and condition
roads, gates, stiles and fences for the convenient
occupation of the surface of the Lease Area.
♦ • ♦ ,
'3
(/) The Company sJhiJJ provide and maintain proper and sufficient
drains, culverts, arches and passageways for cariying
off any waters which shall arise or be produced or
interrupted by any nr the works hereby authorized so
that the drainage of the Lease Area may not be
prevented or prejudiced.
6. NOTrFfCATfON OF DISCOVER? OF OTHER MINERALS:
(a) The Company shall report forthwith to the Minister, the
Chief Executive Officer of the Minerals Commission, the
Chief Inspector of Mines, Inspectorate Division of the
Minerals Commission and the Director of Ghana Geological
Survey, the discovety in the Lease Area of any other mineral
deposits apart from gold and silver and the Company shall
be given the first option to prospect further and to work the
said minerals, subject to satisfactory arrangements between
the Government and the Company.
(b) Failing any such satisfactory arrangements the Company
shall not produce any minerals from the Lease Area other
than gold and silver except where they are unavoidably
linked with the production of gold and silver.
7. SAMPLES:
(a) The Company shall not during the currency of this agreement
remove, dispose of or destroy, except in analyses, any cores or
_samples obtained from the Lease Area without the prior consent in
writing of the Head of the Inspectorate' Division of the Minerals
Commission.
(b) The Company shall provide the Director of Ghana Geological
Survey with such samples^ irbm tne Lease “Area as he'may front---
time to time reasonably request, and shall keep such samples as
he may be directed to do so by the Head of the Inspectorate
Division of the Minerals Commission.
8. HEALTH. SAFETY AND ENVIRONMENTAL PROTECTION: .
<5
(a) The* C
uH inny li'om lime to time be given by the Inspectorate Division of
the Minerals Commission for securing the health and safety of
persons engaged in or connected with the operations hereunder.
The Company shall adopt all necessary and practical
precautionary measures to prevent undue pollution of rivers and
other potable water and to ensure that such pollution does not
cause harm or destruction to human or animal Life or fresh water
fish or vegetation.
9. POWER OF CHIEF INSPECTOR OF MINES OF THE
INSPECTORATE DIVISION OF THE MINERALS COMMISSION TO
EXECUTE CERTAIN WORKS:
If the Company shall at any time fail to comply with any provisions
of this Agreement or applicable law and such failure is likely, In
the opinion of the Chief Inspector of Mines of the Inspectorate
Division of the Minerals Commission, to:
(i) endanger the health or safety of persons, or
(u) endanger the environment, or
(iii) cause harm or destruction to potable water; or
(iv) result in damage to mining equipment or other structures or
installation; the Head of the Inspectorate Division of the
Minerals Commission, shall after giving the Company
reasonable notice, execute any works which in his opinion
- • are-necessary-and practicable, in the cimijmsf-anr.es and the
costs and expenses of such works shall be borne by the
Company.
10. LIABILITY FOR DAMAGE OR INJURY AND INDEMNITY:
(a) Nothing in this Agreement shall exempt the Company from liability
for any damage, loss or injury caused to any person, property or
interest as a result of the exercise by the Company of any rights or
powers granted to it under this Agreement.
7
(b) The Company shall ai all limes indemnify the Government and its
officers and agents against all claims and liabilities in respect of
any loss suffered by or damage done to third parties arising out of
the exercise by llu* Company of any rights or powers granted to it
under this Agreement provided that the Company shall not so
indemnify the Government, its officers and agents where the claim
or liability arises out of the wrongful or negligent acts of the
Government, its officers and agents.
U. EMPLOYMENT AND TRAINING:
(a) Citizens of Ghana shall be given preference for employment
by the Company in all phases of its operations hereunder to
the maximum possible extent, consistent with, safety,
efficiency and economy.
(bj Except with respect to unskilled personnel, the Company
may employ non-Ghanaian personnel in the conduct of its
operations provided that the number of such non-Ghanaian
personnel employed shall not exceed die number permitted
by applicable law.
(c) The Company shall provide appropriate programmes of
instruction and theoretical and practical training to ensure
the advancement, development, improved skills and
qualification of Ghanaian employees in all categories of
employment.
12.---PREFERENCE FOR GHANAIAN GOODS AND SERVICES
In the conduct of its operations and in the purchase, construction
and installation of facilities, the Company shall give preference tot-
la) materials and products made in Ghana, if such materials
and products are comparable or better in price, quality“and~~
•delivery dates than materials and products from foreign
sources;
(b) service agencies located in Ghana owned by Ghanaian
citizens or companies organized pursuant to Ghanaian Jaw,
8
including buL nol limited to, insurance agencies, bidding
contractors, import brokers, dealers and agents if such
agencies give or provide equal or better price and quality of
service than competing foreign firms and can render services
at such times as the Company may require.
13. AFFILIATED COMPANY TRANSACTIONS:
(a) Any services including services in respect of the purchase and
acquisition of materials outside Ghana provided by an affiliated
company shall be obtained only at a price, which is fair and
reasonable. The Company shall, at the request of the Minister,
provide such justification of costs as may be required, duly
supported by an Auditor's certificate if necessary.
(b) Any other transactions between the Company and an affiliated
company shall be on the basis of competitive international prices
and upon such terms and conditions as would be fair and
reasonable had such transactions taken place between unrelated
parties.
(c) The Company shall notify the Minister of any and all transactions
between the Company and an affiliated company and shall supply
such details relating to such transactions as the Minister may by
notice reasonably require.
14. TECHNICAL RECORDS:
(a) The Company shall maintain at its registered or mine offices
_SP.mp.le.te records of pits and trenches (location, depths of
overburden and gravel and assay value} in the Lease Area in such
form as may from time to time be approved by the Chief Inspector
of Mines of the Inspectorate Division of the Minerals Commission,
Chief’ Executive Officer of the Minerals Commission and the
Director of Ghana Geological Survey.
(b) The Company shall maintain at the said offices copies of all reports
including interpretations dealing with gold and silver prospects in
the Lease Area in the course of its operations hereunder and. copies
9
of all tests and analyses, geological and geophysical maps,
diagrams or charts relevant to its operations hereunder. These
reports and records may be examined by persons in the service or
acting on behalf of'the Government and authorized in writing by
the Minister.
(c) The Company shall maintain at the said offices correct and
intelligible plans and sections of all mines which plans and
sections shall show the operations and workings which have been
carried on as well as dykes, veins, faults and other disturbances
which have been encountered In such workings and operations.
All such plans and sections shall be made, amended and
completed from actual surveys conducted for that purpose.
(d) Upon expiration or termination of this Agreement or the surrender
of any part of the Lease Area, such records and data as are
required to be maintained pursuant to this paragraph which relate
to the Lease Area, or such part of the Lease Area as may have been
surrendered shall be delivered to the Chief Inspector of Mines of
the Inspectorate Division of the Minerals Commission, Chief
Executive Officer of the Minerals Commission and the Director of
Ghana Geological1 Survey and shall become the property of the
Government without charge.
15. PRODUCTION RECORDS:
The Company shall maintain at its registered or mine offices
complete and accurate technical records of its operations and
production in the Lease Area in such form as may from time to
time be approved by the Chief Inspector of Mines of the
Inspectorate Division of the Minerals Commission.
16. FINANCIAL" RECORD'S: - "---
(a) The Company shall maintain at its registered or mine offices,
detailed and complete accounts and systematic financial records of
its operations as may be required by law. The books of account
10
shall show all revenues received by the Company from all sources
including its operations hereunder, as well as all Us expenditure.
The Company shall provide for a clear basis for understanding
and relating the financial records and accounts to its
operations.
(b) The Company’s books of account shall be kept on the basis
of generally accepted accounting principles.
(c) The Company shall keep separately records and financial
statements in terms of Ghana currency and also in terms of
U.S. Dollars or other international currency and may record In
foreign currency such claims and liabilities as arise in such
foreign currency.
(d) The Company’s books of account shall be audited within six (6)
months after the close of each Financial Year by a qualified
Accountant and member of the Ghana Institute of Chartered
Accountants. Such auditing shall not in any way imply
acceptance of its results by the Government or preclude the
Government from auditing such books of account The
Company shall deliver to the
Minister without charge, copies of all or any part of such
financial records as he may from time to time reasonably
request
17. REPORTS:
- (a)--Tfee-Company shaU-fucmsh.a report each quarter, to the
Minister, the Chief Inspector of Mines of the Inspectorate
Division of the Minerals Commission, the Chief Executive
Officer of the Minerals Commission and the Director of
Ghana Geological Survey, in such forms as may from time to
time be approved by the Minister, regarding the quantities of
gold and silver won in that quarter, quantities sold, the
revenue received and royalties payable for that quarter and
such other information as' may be required.' 'Such reports
M
shall he submiiirtl nol later Ilian thirty (30) days after the
end of each quarter.
(b) The Company shall furnish a report each half-year to the
Minister, the Chief Inspector of Mines of the Inspectorate
Division, Minerals Commission, the Chief Executive Officer
of the Minerals Commission and the Director of Ghana
Geological Survey in such form as may from time to time be
approved by the Minister summarising the results of its
operations in the Lease Area during the half-year and
records to be kept by the Company pursuant to paragraphs
14, 15 and 16 hereof. Each such report shall include a
description of any geological or geophysical work carried out
by the Company in that half-year and a plan upon a scale
approved by the Head of the Inspectorate Division of the
Minerals Commission showing dredging areas and mine
workings. Such reports shall be submitted not later than
forty (40) days after the half-year to which they relate.
(c) The Company shall furnish a report each Financial Year in
such form as may from time to time be approved try the
Minister to the Chief Inspector of Mines of the Inspectorate
Division of the Minerals Commission, the Chief Executive
Officer of the Minerals Commission and the Director of
Ghana Geological Survey Department summarising the
results---of its operations-in the Lease-Area during that
Financial Year and the records required to be kept by the
Company pursuant to paragraphs 14, 15, and 16 hereof.
Each such report shall include a description of the proposed
operations for the following year with an estimate of the
production and revenue to be obtained therefrom. Such
reports shall be submitted not later than sixty (60) days after
the end of each Financial Year.
12
(cl) The Compjmy slmll furnish ihe Minister, the Chicr Inspector
of Mines «r Ihe Inspectorate Division of the Minerals
Comniissiou, (he Chief Executive Officer of the Minerals
Commission nnd the Director of Ghana Geological Survey
not Is11t*r Hmn three (3) months after the expiration or
tcrmiimtinn of this Agreement, with a report giving an
account or the geology of the Lease Area including the
stratigraphic and structural conditions, together with a
geological map on a scale prescribed in the Mining
Regulations.
(e) The Company shall furnish the Minister and the Chief
Executive Officer of the Minerals Commission, with a report
of the particulars of any proposed alteration to its
regulations. The Company shall also furnish the Minister
and the Chief Executive Officer of the Minerals Commission
with a report on the particulars of any fresh issues of shares
of its capital stock or borrowings in excess of an amount
equivalent to the Stated Capital of the Company. All such
reports shall be in such form as the Minister may require
and shall be submitted not less than twenty-one (21) days
(or such lesser period as the Minister may agree) in advance
of any proposed alteration, fresh issue or borrowing, as the
case may be.
0 The Company shall, not later than 180 days after the end of
each Financial Year, furnish the Minister and the Chief
Executive of the Minerals Commission with a copy each of its
annual financial reports including a balance sheet, profit
and Ioss accounL, and all~fidtes pei'Utinnrg'thereLu, "duly--
certified by a qualified accountant who is a member of the
Ghana Institute of Chartered Accountants. Stich certificate
shall not in any way imply acceptance of such reports by the
13
Govcirnmni* or pivdude the Governmenr from auditing the
Company’s books of account.
(g) The Company shall furnish the Minister, the Chief Inspector
of Mines of the Inspectorate Division of the Minerals
Commission, the Chief Executive Officer of the Minerals
Commission and the Director of Ghana Geological Survey
with such other reports and information concerning its
operations as they may from time to time reasonably require.
INSPECTION!
(a) Any person or persons in the service of or acting on behalf of
the Government and authorized in writing by the Minister
shall be entitled at all reasonable times to enter into and
upon any part of the Lease Area and the Company’s
registered office, for any of the following purposes:
(i) to examine the mine workings, equipment, buildings,
installation and any other structures used in the
mining operation;
(ii) to inspect the samples which the Company is required
to keep in accordance with the provisions of this
Agreement;
(iii) to inspect and check the accuracy of the weights and
measures and weighing and measuring devices, used
or kept by the Company;
-(iv) to examhae-and make abstracts of the bookstand---
records kept by the Company pursuant to this
Agreement;
_(v) to verify or ensure compliance by the Company with all
applicable laws and regulations and with its
obligations hereunder;
(vi) to execute any works which the Chief Inspector of
Mines of the Inspectorate Division of the Minerals
Commission may be entitled to execute in accordance-
14
with the: provisions of the Mining Laws and
Regulations of Ghana, or of this Agreement.
(b) The Company shall make reasonable arrangements to
facilitate any such work or inspection, including making
available employees of the Company to render assistance
with respect to any such work or inspection. All such works
and inspections shall be listed by the Company in the
reports and furnished each half year.
19. CONFIDENTIAL TREATMENT:
The Government shall treat all information supplied by the
Company hereunder as confidential for a period’ of five (5) years
from the date of submission of such information or upon
termination of this Agreement whichever is sooner and shall not
reveal such information to third parties except with the written
consent of the Company which consent shall not be unreasonably
withheld. The Government and persons authorized by the
Government may nevertheless use such information received from
the Company for the purpose of preparing and publishing general
reports on Minerals in Ghana and in connection with any dispute
between the Government and the Company.
20. FINANCIAL OBLIGATIONS:
(a) Consideration Fees
The Company shall, in consideration of the grant of the
Mining Lease pay to Government an amount of
US$30,000.00 (thirty thousand U.S. Dollars).
(b) Rent:
The Company shall pay rent (which shall be subject to
pesewas) i.e. 50Gp per square kilometre)
[i) the said rent shall be paid half yearly in advance on or
before the first day of January and on or before the
first day of July in each year.
15
(ii) in the rvt'iii of a surrender of any part of ihe Lease
Area pursuant to paragraph 25 hereof, no rental
payments shall be refunded in whole or in pari of any
area so surrendered for which yearly rental has been
paid in advance or shall rental payments be refunded
in the event of termination.
21. ROYALTIES:
(a) The Company shall pay to the Government royalty as
prescribed by the legislation.
(b) The Company shall pay royalty to the Government each
quarter through the Commissioner of Internal Revenue
based on the production for that quarter, within thirty (30)
days from the end of the quarter.
Any necessary adjustments shall be made annually within
sixty (60) days of the end of each Financial Year, except that
any over-payment of royalty shall not be refunded by the
Government but shall be credited against royalty due and
payable in the next quarter.
(c) In the event of a dispute with respect to the amount of
royalty payable hereunder, the Company shall first make
• payment of the lower of the disputed amounts and shall pay
forthwith any further royalty which shall be agreed upon or
determined to be payable by arbitration in accordance with
paragraph 35 hereof. Such further royalty shall carry
interest to be agreed upon o"r at the ruling prime rite' in
Ghana at the time of the award or agreement to take effect
from the date on which such amount ought originally to have
been paid-:- - . ___
(d) The Company shall also pay royalty on all timber felled by
the Company in accordance with existing legislation.
22. LATE PAYMENTS:
16
(n) Anvilnnu herein eunlained to Lhc contrary notwithstanding,
ilit* Company shall, subject to the laws of Ghana, pay as
penally for any late payment of any amounts due to the
Government hereunder, an additional amount calculated at
tin* Hank of Ghana re-discount rate for every thirty-day
period or part thereof for the period of the delay in paying
the amounts, that is to say, the period between the actual
payment date and the date on which each such payment
should have been made.
(b) In the event the Company shall fail to make payment to the
Government of any amount due hereunder, the Government
without prejudice to any other rights and remedies to which
it may be entitled, may, after giving 30 days notice in writing,
enter into and upon the Lease Area and seize and distrain
and sell as landlords may do for rent in arrears, all or any of
lhc stocks of gold and silver produced therefrom, and the
plant and equipment, materials and supplies belonging to
Lhc Company which shall be thereon; and out of the monies
obtained from the sale in respect of such distress may retain
and pay all of the arrears of any amounts due hereunder and
the costs and expenses incidental to any such distress and
sale and deliver up the surplus (if any] to the Company.
23. TAXATION:
(a) The Company shall not be required to deduct or withhold
any taxes from any payment made from its external account
of which is authorized under the terms of the Minerals and
Mining Act, 2006 (Act 703) of:
(i) any interest or other costs or fees paid in respect of"
any
borrowing by or on behalf of the company in foreign
currency for the project;
(ii) ' any dividends paid to the shareholders.
17
(h) Save for ilu* above, the Company shnli pay lax in accordance
with the laws of Ghana.
24. FOREIGN [EXCHANGE:
All foreign exchange transactions shall be in accordance with the
laws of Ghana.
25. SURRENDER:
(a) The Company may surrender at any time and from time Lo
lime, by giving not less than two months’ notice to the
Minister, all its rights hereunder in respect of any part of the
Lease Area not larger in the aggregate than 20% of the said
Area. The Company may surrender a larger part of the Lease
Area by giving not less than twelve (12) months’ notice to the
Minister. The Company shall be relieved of all obligations in
respect of the part or parts of the Lease Area so surrendered
except those obligations, which accrued prior to the effective
date of surrender.
(b) The Company shall leave the part of the Lease Area
surrendered
and everything thereon in a good and safe condition,
provided, however that the Company shall have no such
obligations for areas surrendered on which the company has
not undertaken any works or which have not been affected
by the operations of the Company. The Company shall take
all reasonable measures, in accordance with good mining
practices to leave the surface of such part of the Lease Area
surrendered, in good and usable condition having regard to
the ecology, drainage, reclamation and the protection of the
~ environment. In the evenl"lhat the Company-fails to- do-sor---
the Minister shall make such part and eveiything thereon
safe and in good, usable condition at the expense of the
Company. The provisions of sub-paragraphs (a) and (c) of
paragraph 29 hereof shall apply. .
18
(c) The Company shall, on such terms and conditions as may be
agreed upon between the Government and the Company, be
entitled to such wayleaves, easements or other rights
through or across the surrendered part or parts as may be
necessary for its operations and such wayleaves shall not
form pari or be included in the calculation of the area of the
retained part.
(c) The Government may require that there be reserved over any
part surrendered such wayleaves, easements or other rights
as will in Its opinion be necessary or convenient to any party
to whom the Government may subsequently grant a
prospecting licence or mining lease.
26. EXTENSION:
If the Company, not less than six (6) months before the expiration
of this Agreement, applies to the Minister for an extension of the
term hereof and if the Company shall not be in default at that time
in the performance of any of its obligations hereunder, the
Company shall be entitled to an extension of the period of this
Agreement upon such terms and conditions as the parties may
then agree.
27. COMPANY’S RIGHT TO TERMINATE AGREEMENT:
The Company may, if in its opinion the mine can no longer be
economically worked, terminate this Agreement by giving not less
_ than nine (9) months’ notice to the Government Such termination
shall be without prejudice to any obligation or liability incurred by
the Company hereunder prior to the effective date of such
termination.
28. 'GOVERNMENT'S'lQ~GHT~irO"'rERMrNATE~A'GkEhJMENTr---
(a) The Government may, subject to the provisions of this
paragraph terminate this Agreement if any of the following
events shall occur:-
(i) the Company shall fail to-make any of the payments
19
provided for in Lhis Agreement on Che payment date;
(ii) the Company shall contravene or fail to comply with
any other provisions of this Agreement; or
(iii) tlu*. Company shall become insolvent or bankrupt or
enter into any agreement or composition with its
creditors or take advantage of any law for die benefit of
debtors or go into liquidation, whether compulsory or
voluntary, except for the purposes of reconstruction or
amalgamation; or
(iv) the Company makes a written statement to the
Government on any material matter in connection with
this Agreement or with its operations which die
Company knows to be false or makes recklessly
without due regard as to whether it was true or false.
(b) If and whenever the Government decides there are grounds
to terminate this Agreement pursuant to clauses (i) and (ii) of
the preceding sub-paragraph, the Government shall give the
Company notice specifying the particular contravention or
failure and permit the Company to remedy same within one
hundred and twenty (120) days of such notice, or such
longer period as the Minister may specify in such notice as
being reasonable in the circumstances.
(c) If the Company shall fail to remedy any event specified in
clauses-artd (ii) of sub-paragraph (a) of this-paragraph within-
the stated period, or an event specified in clauses (iii) and (iv)
of the said sub-paragraph shall occur, the Government may
by notice to the Company terminate this Agreement,
provided that if the Company disputes whether there has
been any contravention or failure to comply with the
conditions hereof (including any dispute as to the calculation
of payments by the Company to the Government hereundrr).
and the Company shall, within such period as aforesaid rWn
20 i
the dispute lo mahi( ration in accordance witli paragraph 35
hereof mul, Lhoreafter, diligently prosecute its claim
thereunder, the Govemment shall not terminate this
Agroemenl except as the same may be consistent with the
terms of the arbitration award.
(d) No delay or omission or course of dealing by the Govemment
shall impair any of its rights hereunder or be construed to be
a waiver of any event specified in sub-paragraph (a) of this
paragraph or an acquiescence therein.
(e) Upon termination of this Agreement, every right of the
Company
hereunder shall cease (save as otherwise specifically
provided hereunder) but subject nevertheless and without
prejudice to any obligation or liability imposed or incurred
under this Agreement prior to the effective date of
termination and to such rights as the Government may have
under Lhe law.
ASSETS ON TERMINATION OR EXPIRATION:
(a) The Company may within six months of the termination of
the Mining Lease or a farther period allowed by the Minister,
remove the mining plant if the mining plant is removed solely
for the purpose of use by the Company or a person deriving
title through the Company, in another relevant mining
activity-in- the- Countiy. --------
(b) A mining plant not removed by the Company within two
months after notice is given by the Minister to the Company
at anytime after expiration of the period referred to in
subsection (a), shall vest in the Republic on the expiration of
the two month notice period.
(c) Nothing in this Agreement removes or diminishes an
obligation that the Company may have under the Minerals
and Mining Act, 2006, (Act 703), another enactment or a
21
condition of tills Agreement Lo remove a mining plant and
rehabilitate the land.
(d) Notwithstanding the foregoing, the Minister, may by notice to
the Company require the removal or destruction of any
assets of the Company in the Leased Area, and if the
Company docs not remove or destroy such assets within a
period of thirty (30) days from the date of the Minister’s
notice to that effect, the Minister shall cause such removal or
destruction at the expense of the Company.
(e) The Company shall take all reasonable measures to ensure
that all of the assets to be offered for sale to the Government
or transferred to the Government in accordance with this
paragraph shall be maintained in substantially the same
condition in which they were at the date of the termination
or the date on which the Company reasonably knew that
such termination would occur and any such assets shall not
be disposed of, dismantled or destroyed except as specifically
provided for in this paragraph.
(1) Upon the termination or expiration of this Agreement, the
Company shall leave the Lease Area and everything thereon
in good condition, having regard to the ecology, drainage,
reclamation, environmental protection, health and safety;
provided however that the Company shall have no obligation
in respect of areas where the Company has not undertaken
----any work or which have not been.affer.fed by the Company's
operations. In this connection, unless the Chief Inspector of
Mines otherwise directs, the Company shall, in accordance
with good mining practices, fill up or fence and make safe all
holes and excavations to the reasonable satisfaction of the
Chief Inspector of Mines. In addition the Company shall
take all reasonable measures to leave the surface of the
Lease Area in usable condition and to restore all structure?;
22 *
ihoivon not the properly of the Company to their original
condition. In the event that the Company fails to do so, the
• Minister shall restore and make safe the Lease Area and
everything thereon at the expense of the Company.
(g) The Company shall have the right to enter upon the Lease
Area for the aforesaid purposes, subject to the rights of
surface owners or others, for a period of six (6) months from
the effective date of the termination or such longer period as
the Minister may decide.
(h) On the termination of this Agreement, the Company shall
deliver to the Minister the records which the Company is
obliged to maintain under die Minerals and Mining Act,
2006, (Act 703); the plans and maps of the area covered by
the mining lease prepared by the Company; and other
documents, including in electronic format, if available that
relate to the mineral right,
30. FORCE MAJEURE:
(a) For the purpose of this paragraph, force majeure includes
acts of God, war, strikes, insurrection, riots, earthquakes,
storm, flood or other adverse weather conditions or any other
event which the Company could not reasonably be expected
to prevent or control, but shall not include any event caused
by a failure to observe good mining practices or by the
negligence of the Company or any of its employees or
contractors.
(b) The Company shall notify the Minister within forty-eight (48)
hours of any event of force majeure affecting its ability to
ftXLfil “the “conditions hereof-ot---of' any-events,-which may---
endanger the natural resources of Ghana and similarly notify
the Government of the restoration of normal conditions
within forty-eight hours of such restoration. This provision
23
shall be in addition lo any requirements contained in the
Mining Regulations in force in Ghana.
(c) All obligations on the part of the Company to comply with
any of the conditions herein (except the obligation to make
payment of monies due to the Government) shall be
suspended during the period the Company is prevented by
force majeure from fulfilling such obligations, the Company
having taken all reasonable precautions, due care and
reasonable alternative measures with the objective of
avoiding such non-compliance and of carrying out its
obligations hereunder. The Company shall take all
reasonable steps to remove such causes of the inability to
fulfil the terms and conditions hereof with the minimum of
delay.
(d) The terms of this Agreement shall be extended for a period of
time equal to the period or periods during which the
company was affected by conditions set forth in the sub-
paragraph (a) and (b) of this paragraph or for such period as
may be agreed by the parties.
31. POLITICAL ACTIVITY:
The Company shall not engage in political activity of any kind in
Ghana or make a donation, gift or grant to any political party. The
Company shall make it a condition of employment that no
emplayeBpother than- a-cidzen of Ghana-shaihengage in-poKticah
activity and shall not make donations, gifts or grants to any
political party. In the event of any such employee acting in
- disregard to this condition, he shall be dismissed forthwith._
32. ADVERTISEMENTS. PROSPECTUSES. ETC:
Neither the Company nor any affiliated Company shall in any
manner claim or suggest, whether expressly or by implication that
the Government or any agency or official thereof, has expressed
any opinion with respect to gold in the Lease Area and no
24
statement to this effect shall be included in or endorsed on any
prospectus notice, circular, advertisement, press release or similar
document issued by the Company or any affiliated Company for
the purpose of raising new capital.
33. CO-OPERATION OF THE PARTIES:
Each of the parties hereto undertake that it will from time to time
do all such acts and make, enter into, execute, acknowledge and
deliver at the request of the other party, such supplemental or
additional instruments, documents, agreements, consenls,
information or otherwise as may be reasonably required for the
purpose of implementing or further assuring the rights and
obligations of the other party under this Agreement.
34. NOTICE;
Any application, notice, consent, approval, direction, instruction or
waiver hereunder shall be in writing and shall be delivered by hand
or by registered mail. Delivery by hand shall be deemed to be
effective from the time of delivery and delivery by registered mail
shall be deemed to be effective from such time as it would in the
ordinary course of registered mail be delivered to the addressee.
35. ARBITRATION AND SETTLEMENT OF DISPUTES:
(a) Any dispute between the parties in respect of the
interpretation or enforcement of the provisions of this
document shall be settled in accordance with the procedures
__available, in -Ghana for the settlement of such dispute
provided that at the instance of either of the parties any
such dispute may be submitted for settlement by arbitration
under the Arbitration Rule of the United Nations
Commission on International Trade Law (the “UNCITRAL
Rule").
(b) Any arbitration under the UNCITRAL Rules shall be by three
(3) arbitrators unless the parties agree to a single arbitrator.
The place of arbitration shall be Accra and'the proceedings .
25
shall be in English unless the parties otherwise agree.
Ghana Law shall be the law applicable to the proceedings.
(c) Nothing in clause 35(a) or 35(b) shall prevent eiLher of the
parties from requesting any judicial authority to order
provisional measures prior to the initiation of arbitration
proceedings or during the proceedings for the preservation of
their respective rights.
(d) The parties acknowledge and that this Agreement was made
on the basis of the laws and conditions prevailing at the date
of the effective conclusions of the negotiation of this
Agreement and accordingly, if thereafter, new laws and
conditions come into existence which unfairly affect the
. interest of either party to this Agreement, then the party so
unfairly affected shall be entitled to request a re-negotiation
and the parties shall thereupon re-negotiate.
The parties hereby undertake and covenant with each other
to make every effort to agree, co-operate, negotiate and to
take such action as may be necessaiy to remove the causes
of unfairness or disputes.
36 ASSIGNMENT AND TRANSFER OF RIGHTS:
(a) This Agreement shall not be assignable in whole or in part by
the Company without the prior consent in writing of the
Government
---(b). The Government may impose such conditions precedent to _
the giving of such consent as it may deem appropriate in the
circumstances. No assignment, however, ma}' relieve the
Company of its obligations under this Agreement except to
the extent that such obligations are actually assumed by the
Assignee.
(c) During the term of this Agreement, no shares of the capital
stock of the Company may be transferred except in
accordance with the Minerals and Mining Law.
26
37. HEADINGS:
The headings given to paragraphs in this Agreement are for
convenience only and shall not affect Lhe construction or
interpretation of this Agreement.
38. GOVERNING LAWS:
This Agreement shall be governed and construed in accordance
with the Laws of Ghana.
i
i s
t
. l
I
l
27
6*2(r
THIS IS THE PLAN REFERRED TO
7.N CHE ANNEXED MINING LEASE
DATED THIS
RESOURCES
P. 0. BOX MS 212. ACCRA
IN WITNESS OF WHICH the Parties have respectively executed the
original ancl counterpart of this Agreement on the date first above
written.
SIGNED BY THE GOVERNMENT OF THE ] .._____
REPUBLIC OF GHANA acting by ] // - .vW
ALHAJI COLLINS DAUDA, the Minister ] a-t -*/
of Lands and Natural Resources who by ]
this execution warrants to the other party J
that she is duly authorized and empowered] HOV \ • ;■ ---
enter into this Agreement in the presence ] MIN. 0? MtNIST^
of: ] Mlijli £>F Mtjlps
- RESOURCES A.
P. O. BCX MB 212, ACCRA
SIGNED BY THE WITHIN-NAMED ]
NEWMONT GOLDEN RIDGE LIMITED ]
acting by its Chief Executive/Managing ]
Director who by this execution warrants ]
to the other party that he is duly ]
authorized and empowered to enter into ]
this Agreement in the presence of: ]
(DIRECTOR/SECRETARY)
29 /’
OATH OF PROOF
*» of ACCRA make oath and i.
say that on the day of 2010 I was present and k
saw ALHAJI COLLINS DAUDA, Minister of Lands and Natural Resources
duly execute the Instrument now produced to me and marked “A" and
i
M
.■t
a ecu. A
] On the A^day of M1Q at/Q^ 0,dock the
noon this Instrument was proVcd b C me fay ^ Qath of ^ within.
named V=r\’<-'L * -*p._
to have Been duly executecT ^T the within-named AlHAJI COLLINS
DAUDA for and on behalf of “«■>„ r>
the Government” of the Republic of Ghana \
for Lessor herein.
s
mieas
Dated this day of 2010
GOVERNMENT OF THE REPUBLIC OF GHANA
AND
/ •»: 5=- -ft m ,
S'^r i.. NEWMONT GOLDEN RIDGE LIMITED
\y
/•c.
MINING LEASE -£
: FIFTEEN (IS) YEARS
€
Sdjjw SNCBMSgjT
' '■d i
EXPIRY DATE
FILE NO
-SOLICITOR-GF-THE SUPREME-COURT
GHANA
31
APPENDIX B
CALCULATION OF ROYALTY
Appendix 6
Illustrative Calculation of Royal)
, . . Providedforthe purpose of Outvoting the tokvlatleiimedianlsmdefiped bisections; MtladiaithteofpKdktetlvohmes,ptke, revenue, otdbtr&tttfoB. The Royalty Rote skavaibekr/appBes only togold mined htaforest reserve area.
Tor gold mined ovtsldcaforest reserve area literate Is 03 patcmoce points lower but net lower than 3% le.g. a royalty role shcnn below of4AKYma!d be 33X and one ofS.iliwauM he 3SS).
(Average Gold Price. Year
Royalty Rate IMmgWHHTIPlBBUHl
' * 3.6* | 1 SMO 51.293L99
Iteini 4.1* 1 ^ 51.300.00 51.44549
n 4.6* 51.450.00 $229939
• 5.6% l 52400.00 Unlimited
••ltemr.Ii «&&&,'!+& •• .s^vw ;•>:<«« 1'ri^.:;Ri2?^R2January{^ftbKiafy3^Macdi^V^ApHI^!^Ma^^^liino^i^JulyHS?S?AOeKt'S2S(mt
.••»■• i. Average Monthly Gold Price ( >/a0 $1,100.00 $1,290,00 $1,295.00 $1305.00 $1/14939 $1,44939 $1,450.00 $2300.00 $9,299.00 $2,30030 $2305.00 $3,000.00
"2 mB&s*snp.&v&m
.%
*.s Applicable Royalty Rate (*) 3.6% 3.6% 3.6% 4.1H 4.1% 4.1% 4.6% 4.6% 4.6% 5.6* $.6% S.6%
.•V3.- ssasaw^’ses^s
Ounces Sold [Oz) 40,000 40,000 40,000 40,000 40,000 40,000 40,000 40,000 40,000 40,000 40,000 40,000
'■ '4-{;
' 'S J . Totel Revenues Received ($M) $46.0 $51.8 $52.2 $51.8 $57.8 $62.0 $ 58.0 $86.0 $92.0 $92.0 $92A $11&0
S
•V1 Royalty Paid to Government $M) $1-7 $1.9 $1-9 $2.1 $2.4 $2.5 S2.7 $4.0 S44 S5J. S5J. S64
. € .-v
' NOTE: In conformity with the current un tarstanding andarra gements between Newmont Golden Ridge Limited and the Ghana Revenue Authority, the extra royalty of 03%payable for mining In the
forest reserve, Is paid to the Forestry 0 Commission of Ghana,
tt
i
APPENDIX C
CALCULATION OF GUARANTEED PAYMENTS TO GOVERNMENT
Appendix C • I
Illustrative Calculation of Carried Interest Payments to Government
IpmtMftt tbt pwpwe efStetrnthj Che tolaMta mcdudm dt/lnei la a«tto> A *•» IsdfcMfre vfprt&tttipkt, ickbuq certs «t Jbtrttetkni)
iM|tcmtf&Y»igAfttEFInaBgJWMcir,(art
part 1 - Illustrative Gold Price & Revenue
Avcrstc Yearly CeldFlfce ($/OonuJ $1400 $1100 $1400 $1400 $1400 $2800
SftSOKB
Revenue l$M)_ $3900 $4200 $3900 $3600 $3900 $4800 $5400 $3600 $4S00 $$40,0
Sis *a*sr/
Part 2 - Guaranteed Advance Payment calculation under section 6.2
CumlitaUve Guaranteed Advance payments ($M| $ $oo $23 $23 $4.7 $73 $103 $108 $133 S 16.7
153353.' sggjasagssg&i^ S333??SS
Part 3 • Government Interest calculation under Section &1
im DMdcndt Oecleted, to Shareholder* ($M) $oo $00 $00 $00 $oo $00 $$40 SS4Q $673 $1080
SailiS&i Wt^V&%i3S8£&
tm lysifi of Declared Dividends |$m) 1 $oo $oo $oo $oo $oo $00 $60 $60 $73 $120
aiaa&asaB^a&MasBBfiatt^ia^^
Part 4 • Government Carried Intcroid Payments
0.6K Guaranteed Advance Payment |$M) $00 $0.0 $23 $0.0 $23 $23 $3.2 $0.0 $27 $33
$0,0 $0,0 $0.0 $0.0 $00 $03 $0.0 $22 $4.8 $8.8
l/9GevemmentlnnreKFeyabIe(SM| ._
^aia^liiiS^B^d^g^SlgKiSaSl rSgKSsaig&ak&&aba^
m Total Government Carried Intcreit Payments ($M) $0.0 $0.0 $23 $0.0' $23 $29 $33 $12 $7.S $120
K5SWH?fi57‘'S»e'?Pr
APPENDIX D
MINING LIST
MINING LIST
SERIAL R DESCRIPTION HS.CODE TAX RATE
001 AIR COMPRESSORS AND SPAREPARTS 8414100000 5
8414100001
8414100002
8414100003
oaz AIR DRYER & SPARES 8414100004 5
841410000S
8414100006
8414100007
8414100008
8414100009
•
003 AIR FILTER SYSTEMS AND SPARES 8414100010 5
8414100011
004 AIR OILERS FOR COMPRESSED AIR 8414100000 5
8414900000
8414590000
OOS AIR RECEIVING TANKS 7311000000 5
006 AMALGAM BARRELS 7326190000 5
.
007 AMMETERS-ELECTRIC 9030390000 5
008 ARMATURES 8S03000000 5
009 AUTOMATICSAMPLING 8474100000 5
EQUIPMENT&SPARES 8474900000
010 AXLE BOXES - SPECIALLY DESIGNED FOR MINING 8607190000 5
ou BALANCES - ASSAYING 8423820000 5
012 BALANCES - CHEMICAL SPECIFIC GRAVITY & WEIGHTS 9016000000 5
013 BAGS FOR SAMPLING ASSAYING. TAMPING.STEMMING. ETC. ** 5
014 BALL BEARINGS - BEARINGS USED ON MINING 8482100000 5
MACHINERV-&-PLANTS- Rdiwqqnnnn
015 BAT77ERIES -SPECIALLY DESIGNED FOR MINING 85078000 5
016 BELT FASTENERS & TIGHTENERS 8485900000 5
Oil BfclllNu.LALti « BmWLo Or MLLTrPESTCR "
DRIVING MACHINERY
018 BELTING FOR CONVEYORS, CUT OR UNCUT ** 5
019 BLACK LEAD 2504900000 S
020 BLOWLAMPS 8205600000 5
021 BOILER HOUSE PLANT INCLUDING ECONOMISERS 8404100000 5
MINING LIST
SERIAL ft DESCRIPTION H.S. CODE TAX RATE
SUPERHEATERS. CONDENSERS SOOT REMOVERS. 8404200000
GAS RECOVERERS & RELATED ITEMS 8404900000
022 BOLTS - UNDERGROUND SAFETY ROOF 7326190000 5
023 BOLTS & NUTS (FASTENERS) 7318150000 5
7318160000
024 BOTTLES - GUTTA PERCHA 4017000000 S
025 BRASS INGOTS 7403210000 5
026 BRASS RODS 7407210000 5
027 BRONZE 7403220000 5
028 BRUSH 'BURETTE CYLINDER, TEST TUBE & CAMEL HAIR ETC. 9603100000 5
029 BRUSHES- FORTREATMENT PLANT FILTERS 9603500000 S
030 BRUSHES-FOUNDRY 9603500000 5
*
031 BUCKETS AND DISHES-AMALGAM 7326200000 5
032 BUTTON & BAR MOULDS 8480600000 5
033 CALCIUM CARBIDE 2849100000 5
034 CARBON FOR TREATMENT OF ORE (ACTIVATED CARBON) 3802100000 5
035 CARBON BRUSHES (ELECTRICAL) 8545200000 5
036 CARPET STRIP - DIAMOND MINING FOR RECOVERY DIAMONDS 3921900000 S
037 CEMENT- FOR MINING CONSTRUCTION 2523290000 5
038 CEMENTCLINKER FOR MINING CONSTRUCTION 2523100000 5
039 CEMENTSILO 6810990000 5
- ...
040 CHAINS-STEELFOR MACHINERY 7315120000 5
7315820000
731S89000Q
041 CHARTS-WINDER 4905990000 5
"
042 CHECKER PLATES 7302900000 S
043 CHEMICAL ELEMENT INORGANIC 8c ORGANIC 2942000000 5
CHEMICAL COMPOUNDS BEING CHEMICALS & 3102210000
REAGENTS USED IN ASSAYING & PRODUCTION 2503000000
2901100000
. 2904900000
2907110000
2908900000
MINING LIST
SERIAL U DESCRIPTION H.S. CODE TAX RATE
2806100000
2808000000
2804100000
2804100000
2801100000
2805400000
2811110000
2811290000
2812100000
2812900000
2814100000
2824900000
2830100000
2830900000
2831100000
2831900000
2832100000
2833400000
2834100000
2834290000
2839210000
2835290000
2835100000
2836100000
2836990000
2837110000
2837200000
2839110000
2839900000
2842100000
2842900000
8847000000
2851000000
2845100000
2845900000
3823900000
2916110000
2916390000
2930100000
--- ----- 2232900000..
3102100000
3102900000
3103200000
3103900000
3104100000
---3194900000---
044 CLOTH ■ BRATTICE 5310900000 5
7019190000
045 CLOTH -FILTER 5911900000 5
6306190000
,
046 CLOTH -JOHNSON PRESS & CLARIFIER 5911100000 5
MINING LIST
SERIAL if DESCRIPTION H.S. CODE TAX RATE
047 CLOTH POLYPROPYLENE 5408310000 5
048 CLOTH-SCREEN 6307900000 5
049 CONDENSERS- ELECTRICAL 8532300000 5
8532100000
050 COPPER WIRE-BARE 7408190000 5
051 COPPER WIRE INSULATED 8544110000 5
052 COUDUROY- GOLD MINING FOR RECOVERY OF GOLD 5801220000 5
5801320000
053 COTTER PINS 7318240000 5
054 CRUCIBLE-COVERS LINERS OR GOOCH 6903900000 5
055 CRUCIBLE - PORCILAIN FOR MELTING 6901100000 5
056 CRUCIBLE MUFFLE TONGS 8203200000 5
057 CUPELITESAMPLE DIVIDERS 7326190000 5
058 ORE STORAGE/PROCESSING ACCORDING TO 5
CYLINDER DESCRIPTION
059 DESICCANTS EG SILICA GEL - 3823190000 5
060 DESICCATORS 7017900000 5
061 DREDGES & SPARES 8429590000 5
8431410000
8431490000
062 DUMPERS & SPARES 8704231100 5
8704231110
8704231120
8704231130
8708990000
063 DUST COLLECTORS & SPARES 8474800000 5
84749000000
Ub4 ELECTRIC DRYING-OVEN (REPAIRES-SrPARTS]------- ---8514100000--- 5
8514900000
065 ELECTRICAL APPARATUS FOR MAKING & 8536890000 5
BREAKING ELECTRICAL CIRCUITS 5836900000
066 ELECTRICAL CLEANING COMPOUNDS 2851000000 5
067 ELECTRICAL DISTRIBUTION CONTROL PANELS AND PARTS 8537200000 5
8538100000
MINING LIST
SERIAL 8 DESCRIPTION H.S. CODE TAX RATE
8538900000
068 ELECTRICAL LIGHT FIXTURES FOR MINING 9405400000 S
9405910000
9405990000
069 ELECTRICAL MOTORS CONVERTERS, TRANSFORMER RECTIFIERS, 8S01100000 5
RECTIFYING APPARATUS AND PARTS 8S02400000
8503000000
8504100000
8S04500000
8S04900000
8S12200000
8530100000
070 ELECTRICAL SIGNALLING EQUIPMENT 8S30800000 5
8S30900000
8631100000
8531200000
8S31800000
8531900000
071 ELECTRICALSTARTING & IGNITION EQUIPMENT 8S11100000 5
(INTERNALCOMBUSTION ENGINES) DYNAMOS, 8511900000
CUTOUTS ETC. FOR MINING MACHINERY INCLUDING
GENERATORS AND CUTOUT.
' 072 ELECTRICAL TESTING & REPAIRING INSTRUMENTS 9030100000 S
9030900000
' 073 ELECTRICAL TESTING & REPAIRING TOOLS 9024100000 5
9024800000
9024900000
074 ELECTROWINNING CELLS & REPAIRS & PARIS 8543890000
8S43900000
" 075 ELEMENTS ELECTRICAL 5
076 ENGINES • DUMPER DIESEL AND SPARES 8408200000 5
' ~8409990000---
077 EXCAVATING. LEVELING. SAMPUNG. BORING & 8429110000 5
EXTRACTING MACHINERY & PARTS 8429400000
. 8430100000
8430310000
843O69G0U0
8431410000
8431490000
078 EXPLOSIVES FOR MINING 3602009000 5
3603000000
-079 FANS, ALL KINDS (EXCEPT DOMESTIC) AND SPARES .8414590000 5
--- 8414900090
MINING LIST
SERIAL It DESCRIPTION H.S. CODE TAX RATE
080 FERRQSIUCON 7202210000 S
7202290000
081 FIBRE MAN - MADE (FUNGRASS) USED FOR GOLD RECOVERY 5801260000 5
082 FIBREGLASS FLOOR GRATING 7019900000 5
083 FIBREGLASS BOATS FOR GOLD RECOVERY PONDS 8908000000 S
(INCLUDING SPARE PARTS)
084 FILTER WIRE 7314190000 S
OSS FILTERPRESS BAGS 4819300000 5
086 FILTERPRESS-CLOTH material tvoe S
087 FILTERPRESS • PAPER 4808100000 5
088 FILTERS & FILTER ELEMENTS (LIQUIDS & GASES) 8421230000 S
FOR MINING MACHINERY 8421990000
089 FLANGES 7307210000 5
090 FLOW MEASURING DEVICESAND PARTS 9026900000 5
091 FLOWMEASURING DEVICESAND REPAIRES 9026100000 5
092 FORCEPTS WEIGHT STEEL 7326900000 5
•
093 FURNACES, BURNERS FOR LIQUID FUEL (ATOMISERS). 8416100000 5
PULVERISED SOLID FUEL OR FOR GAS. MECHANICAL 8416100000
STOKERS ETC. & PARTS 8417100000
8416900000
8417900000
094 FUSES (VARIOUS) 8535100000 5
095 GAS TESTING APPARATUS 9026200000 5
096 --- SESEBCXES'fMINING MfiCHINERYTEQUIPMENTSfPLANT)--- ---8708400000---
INCLUDING SPARES 8483400000
8483400000
097 6E0TEXTILE FABRIC 5408100000 5
5603.93.00 ??
098 GLASSES - MAGNIFYING PICKERS 9001900000 5
099 GLASSES-METER 7020000000 5
100 GLYSO NO. 4 CORE COMPOUND 3805100000 5
• 101 GOLD WIRE FOR ASSAY • 7108130000 5 .
102 GRINDING MACHINES & TOOLS (INCLUDING GRINDING 8465930000 5
V
MINING LIST
SERIAL ff DESCRIPTION H.S. CODE TAX RATE
WHEELS E.G. CARBORUNDUM WHEELS) 8466920000
6804100000
6804300000
103 GUAGE- ELECTRIC 9028300000 5
104 GUAGE-RINGS 9017900000 5
105 GUAGE - STEAM VACUUM, WATER 9017800000 5
106 GUAGE CHARGE 4905990000 5
107 GUAGE GLASSES, POINTERS 8202100000 5
8202990000
8202990000
8205200000
8205900000
8203100000
8203400000
108 HOSE & HOSE FITTINGS ** 5
109 HYDRAULIC ENGINES. MOTORS & PARTS 8412210000 5
8412290000
8412900000
110 HYDROMETER 9025190000 5
111 HYFLO SUPER CEL 3805100000 5
112 INDIA RUBBER TUBING 4009110000 5
4009420000
123 INDIA RUBBER VALVES 8481100000 5
8481300000
114 INDICATOR CARDS - ENGINE 4911990000 5
115 INGOT MOULDS *« 5
116 INSTRUMENTS FOR PHYSICAlTOR'CHEMtCAL ANALYSIS--- - 9031800000--- -S-----
9027100000
9027900000
117 INSULATED CABLES 8544110000 5
8544200000
--- --------- • ---
118 INSULATORS 854600000 5
8546100000
119 INTERNAL COMBUSTION ENGINES & PARTS FOR 8407100000 5
HEAVY DUTY MINING VEHICLES AND MACHINES 8407900000
8408100000
• • 8408900000
120 JACKS SIMILAR ITEMS 8425490000 5
MINING LIST
SERIAL # DESCRIPTION H.S, CODE TAX RATE
121 JAWS FOR CRUSHERS 8474900000 5
122 JOINT BOX COMPOUND 3805100000 5
122 LABORATORY APPARATUS 8t SPARES THEREOF FOR ** 5
TESTING 8c SAMPLING OF ORE
124 LAMPS - ELECTRIC (EXCLUDING DOMESTIC) 8539100000 5
8539390000
125 LAMPS • HANOVER ULTRA VIOLET/RED 8539490000 5
126 LAMPS - MINERS & SPARES INCLUDING BELTS 8531000000
(LAMP PARTS 8513900000
7804110000
127 LEAD FOIL USED FOR ASSAYING GOLD 7804110000 5
128 LENS.08JECT 9002190000 5
129 LIFTING. HANDLING. LOADING. UNLOADING MACHINERY E.G.: 8428100000 5
LIFTS. HOISTS. WINCHES. CRANES TRANSPORTER CRANES. 8428200000
PULLEY&TACKLE. BELT CONVEYORS, 8428310000
TELEFERICS ETC. & SPARES 8428320000
8428330000
8431310000
8431390000
130 UME- METALLURGICAL 2522100000 5
2522200000
2522300000
131 LIMESTONE 2521000000 5
132 UNATEX. RUBBER LINING FOR PUMPS 400S910000 5
4005990000
133 USSAPOL N D B 3402110000 5
3402900000
....
134 LOCOMOTIVE ELECTRIC - SPECIALLY DESIGNED FOR 8601200000 5
MINING OPERATIONS
13S LOCOMOTIVE SPARES - SPECIALLY DESIGNED FOR 8607110000 5
MINING OPERATIONS 8607990000
136 LOCOMOTIVE DIESEL • SPECIALLY OESIGNED 8605000000 5
FOR MINING
137 LOOP HEAD 9033000000 5
138 LOOP. ZEIS HAND 9033000000 5
, . .. . ..
139 MABOR FOR MAKING CUPLES 6903900000 5
MINING LIST
SERIAL If DESCRIPTION H-S. CODE TAX RATE
140 MACHINERY & MECHANICAL APPLIANCES FALLING 8459100000 S
UNDER CUSTOMS TARIFF 84:59 FOR MINING USE 8459700000
8466930000
141 MACHINERY PARTS NOT CONTAINING ELECTRICAL 8485900000 5
CONNECTORS. INSULATORS, COILS, ETC. - FOR MINING USE
142 MACHINES FOR SORTING. SCREENING, SEPARATING. WASHING 8474100000 5
CRUSHING GRINDING OR ETC. 8c SPARES 8474900000
8474200000
243 MAGNETITE 2601110000 5
2601200000
144 MAGNETS 8S05110000 5
8505900000
14S MAGNIFIER - APLANATIC & COMPOUND 9033000000 5
146 MATTING - FOR FILTER USE IN SOLUTIONTANKS S310100000 S
5301900000
5311000000
147 METAL-MUNTZ 7405000000 5
148 METAL DETECTORS 8521800000 S
149 METERS - ELECTRICAL VOLT GAS. UOUID & ACCESSORIES 9028100000 5
9028900000
150 MIXERS FOR REAGENT STORAGE TANKS 8474800000 5
151 MOULDERS - CHAPLETS, SAND. SPRING & STUD 7326190000 5
152 MUFFLES 6903900000 5
253 TYRES. INCLUDING OUTER COVERS. TUBES RINGS ETC 4011990000 5
FOR EARTH MOVING MACHINES 4013900000
7326909000
1S4 PACKING-ENGINE ETC. ** 5
155 PAD-DIAMOND SORTING 4823900000 5
156 PAPER-WHITE STONE DIAMOND SORTING & 4823900000 5
BLACK GLAZED • - ....
157 PATCHES (RUBBER.VULCANISING 4017000000 5
158 PH CONTROL EQUIPMENT 9027800000 5
159 PHOTSORB 3623190000 5
.
160 PIPES, TUBES 8c FITTINGS ** 5
MININS LIST
SERIAL If DESCRIPTION H.S. CODE TAX RATE
161 PLUMBERS WIPING METAL 7801990000 5
162 POINTERS FOR WATER GUAGE GLASSES 9026900000 5
163 POLYTHELENETUBES/SHEETS FOR MINING 3925100000 5
164 PRESSURE FILTER 8421310000 5
165 PRESSURIZED TANKS IRON. ALUMINIUM. STEEL *« 5
(PLASTIC St ALLOYS)
166 PROTECTIVE CLOTHING. EQUIPMENT Sc SAFETY • • 5
WEAR FOR MINERS
167 PULSOMETERS 8413800000 5
168 PUMP LEATHERS 5
169 PUMPS & SPARES (AIR) 8414100000 5
8414400000
8414900090
170 PUMPS Sc SPARES (UQUID) 8413110000 5
8413810000
8413919000
171 PYROMETERS 9025800000 5
•
172 RAILSWUCHES (NOT ELECTRICAL) Sc OTHER SPECIALIZED 7302200000
MATERIALS FORJOINING/FIXING RAILS 7302300000
7302900000
7316000000
173 RAILS 7302100000 5
174 REFRACTORY BRICKS AND MORTAR 6904100000 5
3816000000
175 REFRACTORY BRICKS AND OTHER REFRACTORY 6902900000 5
CONSTRUCTION MATERIALS
176 REFRACTORY CEMENT & HARDENER 3816000000 5
177 REFRACTORY PRODUCTS OTHER THAN REFRACTORY 6903900000 5
CONSTRUCTION MATERIALS
---278--- AP4n4nnnnn r-
RESISTANCES"• --- iKHUIUUUUU
8533100000
8433400000
179 ROAD ROLLERS & SPARES 8429400000 5
8431490000
180 ROCK DRILLING TOOLS 8207190000 5
• 8207900000
MINING LIST
SERIAL It DESCRIPTION H.S. CODE TAX RATE
181 ROPES-MANILA 5305900000 5
182 ROPES-STEEL HAULING 7312100000 5
183 ROPES WIRE 7312100000 5
184 RUBBER-OILSKINS 4015900000 5
185 RUBBER - PLATES & STOPPERS 4006900000 5
186 RUBBER - SEAT PROTECTORS 4016990000 S
187 RUBBER VALVES 4017000000 5
288 SAFETY VALVES 8481400000 5
189 SCREENING - PERFORATED STEEL PLATES 7212200000 5
7212300000
190 SCREENING-WIRE MESH 7314200000 5
191 SCREENING - WIRE MESH PHOSPHOR BRONZE 7414200000 5
192 SCREENING - WIREMESH, AGATE STEEL 7314200000 5
193 SCREENS - LEMANIT POLYURETHANE SLOTTED 8474900000 5
194 SCREENS FOR VIBRATORY CONVEYORS 7326909000 5
195 SHACKLES FOR WIRE ROPES 7315900000 5
7326190000
195 STEELSHOVELS- MINING (PARTS) 8201100000 5
8531900000
197 SIGNALING EQUIPMENT ELECTRICAL 8S30100000 5
8531100000
8531200000
8531800000
198- rikiri\t -2S0S100000- C
JILIIM, rhYLLl UlVUUHU
2505900000
199 SILICON CARBIDE ABRASIVE GRAINS 6805100000 5
6805200000
6805300000
--- --- •
200 SILICONES 3910000000 5
201 SILVER WIRE (PURE) FOR ASSAYING 7106920000 5
'
202 SOCKETS FOR WIRE ROPES 7326909000 5
203 SOLUFIX CEMENT FOR LINATEX RUBBER 3214900000 5
204 SOLVENT HT1 FOR CLEANING AIR COMPRESSOR 3814000900 5
MINING LIST
SERIAL it DESCRIPTION H.S. CODE TAX RATE
INTERCOOLER TUBES
205 SPIKES-DOG 7317000000 5
206 STAINLESS STEELSCREEN CLOTH 7314120000 5
207 STARCH - MAIZE (REAGENT) 1108120000 5
208 STEAM & OTHER VAPOUR POWER UNITS & PARTS 8404100000 5
8404200000
8404900000
8402190000
8402900000
209 STEEL- ANGLE IRON. CHANNEL IRON BARS & 7216500000 5
PRODUCTS FOR MINING 7215900000
7216100000
7216900000
7216600000
7308909000
7216600000
7227900000
210 STEELS/S 7219120000 5
7219130000
7219140000
211 STEEL- BALLS FOR MILLING (GRINDING MEDIA) 7308900000 5
7326110000
7325.91.00
212 STEEL- DRILLS (ALL KINDS & SECTIONS 7228800000 5
.
213 STEEL- HIGH SPEED TOOL 7227100000 5
7228100000
214 STEEL-MILD BARS FOR REINFORCING CONCRETE 7214100000 5
7214600000
215 STEEL-MILD TOOL 7227900000 5
•
216 STEEL ROLLER JOISTS (NOT BEING BUILDING MATERIALS 7223100000 5
7213SOOOOO
217 STEELSET5 AND STEEL-WORKS FOR SHAFTS 7308900000 5
StEEI-STUm 74?Riannnn 5
219 STEEL-WIRE MESH FOR REINFORCING CONCRETE. 7314200000 5
FOUNDATIONS
220 STEEL WOOL 7323100000 5
221 STEELWORKS. FABRICATED FOR ORE TRANSFER STRUCTURES 7308900000 5
222 STORAGE BATTERIES ELECTRICAL PROTECTIVE 8507100000 5
MINING LIST
SERIAL It DESCRIPTION H.S. CODE TAX RATE
CIRCUITS & PARTS 8507900000
223 SULPHURIC ACID REISTING ENAMEL 3207200000 5
224 SURVEYING INSTRUMENTS & PARTS 9015100000 5
9015900000
225 SYSTOFLEXVANISHED COTTON 6307900000 S
226 TAPS, COCKS, VALVES & SIMILAR APPLIANCES & PARTS 8481100000 5
8481900000
227 TAR SOLVENT 3814000090 5
228 TIN INGOTS 8001200000 5
229 TOGGLES 8485900000 5
230 TOOLS USED IN THE MINING INDUSTRY INCLUDING 8467110000 5
HANDTOOLS 8467890000
2467910000 •
8467990000
8460110000
8460900000
8466930000
8465100000
8465990000
8466920000
8205400000
7318150000
8204110000
8204120000
8204200000
8207200000
8204110000
8204120000
8204110000
8204120000
8201100000
8201900000
MA14AAAAA
8202900000
8202990000
8205100000
8205900000
- 8203100000
231 TRAILERS & PARTS (NOT MECHANICALLY PROPELLED) 8716400000 S
9716900000
232 TRANSMISSION SHAFTS, CRANKS. PLAIN SHAFT. BEARINGS. 8483200000 5
GEARS AND GEARING.FLYWHEEL. PULLEY BLOCKS & PARTS 8483600000
• , , 8483900000
' 5
233 TURBINES& PARIS 8411810000
MINING UST
SERIAL 8 DESCRIPTION H.S. CODE TAX RATE
8411990000
8412100000
8412900000
234 TURNTABLES (RAILWAY & TRAMWAY 860800DOOO 5
235 TWEEZERS. PICKERS 82Q3200000 S
236 TWIST DRILL 8207200000 5
237 UNIVERSAL INDICATOR PAPERS 4823900000 5
238 UNIVERSAL INDICATOR SOLUTION 3823900000 S
239 VANNER BRUSH. BLADE HAIR & NYLON 9603400000 5
9603900000
240 VANNER GREASE, SNOWOOWNS NO. 151 2712100000 5
2710990000
241 VANNER INSULATING 3212100000 S
3212900000
242 VENTILATION DUCTING SHEET- FOR MINE VENTILATION 7210300000 5
7210900000
243 WATER GUAGES& PARTS 9026100000 S
9026900000
244 WATER GUAGES. RINGS 9026900000 5
245 WE1GHT0METERS FOR CONVEYORS 9026900000 S
246 WELDING EQUIPMENT INCLUDING ELECTRODES. SOLDERS 8515110000 5
AND FLUX 8515900000
8311100000
8311900000
3810100000
247 X-RAY EQUIPMENT, SPARES & FILM 9022190000 5
9027900000
3701100000
248 XYLENE 2902410000 S
2902440000
249 viMrni iQTjannnp a Rpn 7INfinLIST 7903100000 9
250 ZINC INGOTS 7901200000 5
251 ZINC SHAVINGS 7904000000 5
7906000000
252 RADIO COMMUNICATION EQUIPMENT (VHP) S
253 COMPUTERISED DISPATCH/TRACKING 5
MINING LIST
SERIAL it DESCRIPTION H.S. CODE TAX RATE
EQUIPMENT/SYSTEM
2S4 LIME PACKAGING BAGS S
2SS ANY OTHER MINING OPERATION SPECIFIC MACHINERY, PLANT 5
AND APPARATUS NOT HEREIN SPECIFIED APPROVED BY THE
COMMISSIONER OF CUSTOMS. EXCISE & PREVENTIVE
SERVICE ON RECOMMENDATION OF THE
MINERALS COMMISSION
GHANA REVENUE AUTHORITY
PREAMBLE TO THE 8th EDITION OF THE MINING LIST
The 3rf Edition of the Mining List, published in 1970 comprised items
imported under the General Concessionary and Duty-Free tariffs. The rates of
duty at that time were either‘free* or 5 per cent
Between 1970 and July 1977 rates of duty applying to the Concessionary
Tariff increased from 5 per cent to 20 percent and the tariffs were renumbered
from B.206(2) to B.205(2). An Import Licence Levy was also introduced.
During this period the General Rate had for many items been amended to
permit duty-free importation.
Hence, as at July 1977 the Mining List Concessionary Tariff was no longer
being used to support clearance of those items where the General Rate was
lower than 20 per cent, and items could accordingly be more fevourably
considered under the General Rate tariff.
i 3. The July 1977 Budget retained all existing Duty-free tariff concessions (F.63
and F.68), but increased General Rate duties to either 35 per cent or 60 per
cent for the majority of imports. In the same budget, the Concessionary Rate 4
* was again increased from 20 per cent to 35 per cent and the Tariff again re¬
numbered from B,205(2) to B.203(23). The Import Licence Levy was
discontinued.
4. The successive changes to tariff numbers and rates of duty, coupled with
I ' changes in the materials and equipment used by the various mines since 1970
made it necessary to produce a 4“ Edition of the Mining List, which was duly
checked and approved by the Comptroller of Customs and Excise on
February, 1981.
5. Between 1981 and 1989 General Rate Duty-Free and Concessionary Tariff
I Rates and structure were extensively amended. Over the same period, it
i became apparent due to ongoing developments in Mining Techniques and
( mechanization, that the Mining last required rationalization and
simplification.
6. A 5th edition ofthe list was prepared and came into effect on 1st January,
1991. This revision was necessitated by the promulgation of the Minerals and
Mining Law, 1986 (PNDC Law 153). Under Section 27 (a) all items
contained in the fist should be admitted free of taxes. The Edition reduced the
---BttmbeF-ofmining tist-entries-4fOm749-to-3i-6-by-ineerporating-minmg-items---
of like nature into more appropriate generalized mining headings.
7. As a result of (a) the introduction of technological changes in mineral
processing; (b) the increase in gold mining companies working within Ghana;
(c) taking cognizance of the national and international economic
environment; (d) the changes that are taking place in the structure of the
mining industry worldwide; (e) while grouping items of a like nature under
more appropriate mining headings, it became obvious that there was the need
to periodically revise the list.
8. A6lheditionofthelistwasaccordinglypromulgatedonMarchl, 1995. This
Edition reduced the number of Mining List items from 316 to 286.
9. Further to review proposed in paragraph 7, the 7th Edition of the list was
promulgated on March 24,1997, having 269 items.
10. Again in line with the spirit of these revisions, the 8th Edition of the list which
reduced the number of items from 269 to 252 was promulgated in 2000.
11. This 901 Edition of the list comprising of253 items is hereby approved under
the following conditions
a. In line with Paragraph 7 the list will now be reviewed annually in
September to which end the mining companies are expected to submit
proposals to the Ghana Revenue Authority for consideration by August
every year.
b. Items that are not included in this list will not attract the Concessionary
Tariffs rates.
c. A new item, SEALS has been added to the list.
d. The list is intended for the use of Mining Companies only.
GEORGE BLANKSON
- CO M M IS&teNER=GBNEBAfc
GHANA REVENUE AUTHOBW7
GHANA CHAMBER OF MINES
2011 MINING UST
semi US.COQfi DESCRIPTION TAX RATES
NIIMBKR
8414100000 AIR COMPRESSORS AND SPARE PARTS 3
1
8414400000
2414900000
2 8414100000 AIR DRYER&SPARES 0
8414900000
8421910000
8421990000
3 8421310000 AIR FILTER SYSTEMS 3
8411990000 AND SPARES
A 8414100000 AIR OILERS FOR J
8414900000 COMPRESSED AIR
8414390000
J s 7211000000 AIR RECEIVING TANKS S
6 7220110000 AMALGAM BARRELS 3
7 9020390000 AMMETERS • ELECTRIC 3
I 8303000000 ARMATURES S
9 8474100000 AUTOMATIC SAMPLING 3
8474900000 EQUIPMENTS SPARES
8407190000 AXLBBOXES-SPECIALLY 3
1 10
DESIGNED FOR MINING
1 PURPOSES
11 8423820009 BALANCES-ASSAYING 3
12 9016000000 BALANCES-CHEMICAL, 5
SPECIFIC GRAVITY6:
. 1 WEIGHTS
13 ACCORDING) TO MATERIALS QAGS-FOR SAMPLING 3
ASSAYING, TAMFIHO,
STEHMtNGETC
14 8482100000 BALL BEARINGS -BEARINGS USED MIN1NO 3
8482990000 MACHINERY & PLANTS
13 8307800000 BATTERIES---SPECIALLY DESIGNED FOR 3
MINING PURPOSES
16 8483900000 BELTFASINERS AND TIGHTENERS 3
17 ACCORDING TO MATERIAL OELUNOXACESiBANDS 3
OF ALL TYPES FOR
DRIVING MACHINERY
IS ACCORDING TO MATERIAL BELT-FOR CONVEYORS, 3
CUT OR UNCUT
IS 2304900000 BUCK LEAD 3
20 8203600000 BLOWLAMPS 3
21 8404100000 BOILBRHOUSS PLANT 3
8104200000 INCLUDING ECONOMISERS
8404900000 SUPERHEATERS, CONDENSERS SOOT
k REMOVERS.
GAS RECOVERERS AND
RELATED ITEMS
22 7326190000 OOL7S-UNDERGROUND 3
SAFETY ROOF
23 7318130000 BOLTS & NUTS 3
7318190000 (FASTNERS)
24 4017000000 QOTTLES-GUTTA PBRQIA 3
23 7403210000 BRASS INGOTS 3
1 Of 12
J
SERIAL US. CODE DESCRIPTION T AX RATES
NUMBER
24 7407210000 QRASSRODS 5
27 7407200000 3RONZE 5
21 9503100005 BRUSH-BURETTE i
CYLINDER, TESTTUDE
AND CAMEL1IA1RETC.
2? 0003210000 BRUSHES-FOR TREATMENT 5
PUNT FILTERS
30 9003200000 BRUSHES-FOUNDRY 5
31 7320200000 BUCKETS&DISHES- 5
AMALGAM
32 S480000000 BUTTON&BAR MOULDS 5
33 2849100000 CALCIUM CARBIDE 5
34 3802100000 CARDON-FOR TREATMENT 5
ORORE (ACTIVATED
CARBON)
33 8345200000 CARBON BRUSHES 5
(ELECTRICAL)
36 3921900004 CARPET STRIP-DIAMOND 3
MINING, FOR RECEOVERY
DIAMONDS
37 2323290000 CEMENT-FOR MINING 5
CONSTRUCTION PURPOSES
33 2323100000 CEMENT CLINKER FOR 5
MINING CONSTRUCTION
PURPOSES
3? 6310990000, CEMENTSILO i
40 7315120000 CHAINSCTEELPORMACHINERY i
41 4S05990000 CHARTS-WDflJBR 5
42 7302900000 CHECKERPLATES S
43 2942000000 CHEMICAL ELEMENTINOR43AN1C& ORGANIC i
CHEMICAL COMPOUNDS BEING CHEMICALS &
REAGENTS USED INN ASSAYING AND
3102310000 PRODUCTION
2303000000
2901100000 A
2904900000
2907110000
2908990000
2805100000
2808004000
2804100009
2804500000
2801100000
2805400000
2204000001
2811110000
2811290000
2812100000
3812900050
2814100000
2815110000
2824900000
2830100000
2830900000
2831100000
iflj ivwmw
W2IOOOM
‘ 2 of 12
SERIAL 1LS. CODE DESCRIPTION TAX HATES
NUMBER
283340000C
2834IOOOOC
2S3429000C
2835IOOOM
2S3529000C
283S10000C
i 2S3620000C
! 2836990000
2837110000
2837200000
I 2839110000
I 2839900000
3842100000
2842900000
2847000000
I 284SIOOOOO
i 2845900000
3823700000
) 2916110000
I 2916390000
\ 2930200000
2932990000
, 3102100000
i 3102900000
i 3103100000
3103900000
3104300000
! 310(900000
/
< 44 5310900000 CLOTH-BRATTICE 5
l
7019110000
45 6306190000 CLOTH-FILTER 5
45 5911100000 CLOTH-JOHHSON PRESS 5
6306190000 AND CLARIFIER
47 5408310000 CLOTH-POLYPROPYLENE 5
4$ 6307900000 CLOTH-SCREEN 5
l 49 8S333 00000 CONDENS ERSELECTRICAL 5
{ 8532100000
50 7408190000 COPPER WIRE-BARE 5
SI 8544110000 COFFER WIRE INSULATED 5
l SI 5801220000 COUDUROY-GOLD MINING 5
j 5801320000 FORRECOVERY OP GOLD
S3 7318240000 COTTER FINS 5
54 6903900000 CRUCIBLE-COVER AND 5
| LINERS FORGOOCH
l SI 6909110000 CRUCIBLE-PORCELAIN 5
. 1 FOR MELTING
S( 8203200000 CRUODLE MUFFLE TONGS 5
\ S3 7326190000 CUPEUIE SAMPLE 3
-4--- - - DIVIDERS
» CORE STORAGE1PROCE5SINO 5
• ACCORDING TO CYLINDERS
i DESCRIPTION
| 59 7017900000 OESICCANTS EG SILICA GEL 5
£0 7017900000 OESIOCATORS 5
fil 8429590000 DREDGES & SPARES 5
8431410000
8431490000
\
3 of 12
SERIAL ILS. CODE DESCRIPTION TAX RATES
NIIMflER
62 miooooo OUMPEKS AND SPARES 5 . *
*703970000
63 8476300000 DCJST COLLECTORS & 0
8474900000 SPARES
« 3914100000 ELECTRIC DRYINGOVEH 5 4
8JH900000 (REPAIRS & FARTS)
65 8536600000 ELECTRICAL APPARATUS 5
9136900000 TOR MAKJNO & DRAEK1N0
ELECTRICAL QRCUITS
66 2962000000 SLECTR1CALCLEANINO 1
COMPOUNDS
67 8617200000 ELECTRICAL D1STRJ DU- 5
smioewe nOW CONTROL PANELS
8139900000 AND PARTS
6S 940540000^ ELECTRICAL LIGHT 1
9401910000 FIXTURES FORMJN1NO
9405990000
69 850IICOOOO ELECTRICAL MOTORS 5
8102400000 i
|
l
8103000000 RECTIFYING APPARATUS
8104100000 AND PARTS
8504500000
8504900000
70 timooooo ELECTRICAL SKJNALUNQ 5
8130300000 EQUIPMENT
71 85M1000001 ELECTRICAL STARTING & S
8111900000 IGNITION EQUIPMENT
(INTERNAL COMBUSTION
ENGINES) DYNAMOS,
CUTOUTS ETC FOR
MINING MACHINERY
(INCLUDING GENERATORS ,>
AND CUTOUT)
72 9030100000 ELECTRICAL TESTING & 5
9030900000 REPAIRING INSTRUMENT
9024100000 ELECTRICAL TESTING &
72 9024800000 REPAIRING TOOLS 5
9024900000
74 3543700000 ELECTROWINNING CELLS 5
8543900000 AND REPAIRS & PARTS
7J 8548100000 ELEMENTS ELECTRICAL 5 .
76 8403200000 ENGINES-DUMPER 5
8409990000 DIESEL AND SPARES
77 8429110000 EXCAVATING, LEVELING, 5
8429400000 SAMPLING, SOUND AND EXTRACTING
MACHINERY
8430100000 AND PARTS
8430310000
8430690000
8431410000
8431490000
71 3602000000 EXPLOS1VES-FORM1N1NO 5
3603000000
79 8414590000 PANS, ALL KINDS OF 5
8414900000 (EXCEPT DOMESTIC) AND
SPARES
SO 7202210006 FERROS IUCON 1
4 Of 12
SERIAL ILS.C0DE DESCRIPTION tax rates
NUMBER
7202290000
81 3S01250000 FID RE-MAN MADE s
(FUNGRASS) USED FOR
SOLD RECOVERY
S3 7019900000 FIBREGLASS FLOOR 5
GRA7INO
S3 6908000000 FIBREGLASS BOATS FOR GOLD RECOVERY 5
PONDS
(INCLUDING SPARE PARTS)
14 7314190000 FILTER WIRE 5
83 4819300000 FILTER? HESS-BAGS 5
u ACCORDING TO F1LTERPRESS-CLOTH 3
MATERIAL
S3 4803100000 F1LTERPRESS-PAPER 5
88 8421230000 FILTERS ft FILTER 3
8421990000 ELEMENTS (UQU [DS it
OASES) FOR MINING
MACHINERY
88 3917400000 FLANGES 5
7307210000
9(1 9025900000 FLOW MEASURING DEVICES 5
9025100000 AND PARTS
91 9026200000 FORCEPS WEIGHT STEEL 5
93 8416100000 FURNACES, BURNERS FOR 5
8415200000 LIQUID FUEL
8417100000 (ATOMISERS).
8415900000 FULVERSISBD SOLID FUEL
8417900000 OAFOR GAS; MECHANICAL
STOKERS ETC ft PARTS
93 8533100000 FUSES (VARIOUS) 5
94 9026200000 OAS TESTING APPARATUS 3
93 870840000C GEARBOXES (MINING 3
8483400000 MACHINERY, EQUIPMENT
8483900000 ft PLANT) INCLUDING
SPARES
9i 9408100000 GEOTEX3UE FABRIC 3
97 9001900000 GLASSES-MACN1FYING 5
PICKERS
98 7020000000 GLASSES-MEIER 5
93 3803100000 0 LYSO NO, 4 CORE 5
COMPOUND
100 7108130000 GOLD WIRE FORASSAY (GOLD BULLION) 5
101 8453930000 GRINDING MACHINES ft TOOLS (INCLUDING 5
8455920000 □RINDING WHEELS EG
6804100000 CARBORUNDUM WHEELS)
5804300000
103 9028300000 GUAGE-ELECTRIC 5
-|M ------ -9017900000 GWtOB=RINCSFOR--- 5
[CM 9017800000 OUAGE-STEAM VACUUM. 5
WATER
103 4903990000 GUAGECHART 5
100 7020000000 GUACE GLASSES, 5
8202100000 POINTERS FORHANDTOOLS
' 8202910000
5 of 12
SERIAL iLS. CODE DESCRIPTION TAX RATES
NUMBER
8202J5000C
8283100000
2203100000
8203400000
105 ACCORDING TO HOSE& HOSE FITTINGS 5
MATERIAL
101 £412210000 HYDRAULIC ENGINES. 5
6412290000 MOTORS & PARTS
1412500000
10$ $025100000 HYDROMETER 5
110 3805100000 HYFLO SUPER CELL 5
111 • 4005(10000 INDIA KUDBEJ! TUBING S
4009120000
112 $451100000 INDIA RUBBER VALVES s
$431300000
113 4911990000 INDICATOR CARDS --- s
ENGINE
111 ACCORDING TO INGOT MOULDS s
MATERIAL
115 $031800000 INSTRUMENTS FOR 5
$027100000 PHYSICAL OR CHEMICAL
$027900000 ANALYSIS
116 $544110000 INSULATED CABLES 5
8514200000
117 8546100000 INSULATORS S
8546900000
111 840S20000C INTERNAL COMBUSTION S
$406700000 ENGINES & PARTS FOR
8404100000 HEAVY DUTY MINING
8408900000 VEHICLES AND MACHINES
11$ 8425490000 IACK& SIMILAR ITEMS s
120 8474200000 JAWS FORCRUSIIERS s
121 3805100000 JOINTS SOX COMPOUND 1
122 ACCORDINGTO DESCRIPTION LABORATORY APPARATUS s
9031800000 Si S PARESTHEREO P FOR
TEST1NO & SAMPLING OP
ORE
123 8539100000 LAMPS-ELECTRIC s
8539390000 (EXCLUDING DOMESTIC)
121 8539410000 LAMPS HANOVER ULTRA 5
VIOLET/RED
12) 8513900000 LAMPS-M1NERS & S PARES s
INCLUDING DELTS
(LAMP PARTS)
126 7804110000 LEAD FOIL USED 5
FOR ASSAYING GOLD
127 9002190000 LENS. OBJECT 5
-121 OrflOliYIlW ICTlVtn
8428200000 LOADING, UNLOADING
8429310000 MACH) NERVED: LIFTS,
8428320000 HOISTS, WINaiES. CRANES
8428330000 TRANSPORTER CRANE.
8431310000 PULLEY i: TACKLE. BELT
8431390000 CONVEYORS. TELEFER1CS
- --- .. - ___ ETCASPAItPS
6 of 12
SERIAL ILS.CODE DESCRIPTION TAX RATES
NUMBER
125 2322100000 LIME-METALLURGICAL 5
2322300000
2322300000
130 2321000000 LIMESTONE 5
131 4003910000 UNATEX. RUDDER 3
4003990000 L1N1N0 FOR PUMPS
132 3402110000 mSAPOLNDD 3
3402900000
133 9601200000 LOCOMOTIVE ELECIRIC- 0
SPEOALLY DESIGNED
FOR. MINING OPERATIONS
134 9607110000 LOCOMOTIVE SPARES- 0
3607990000 SPEQC1A1LY DESIGNED
FOR MINING OPERATIONS
133 1603000000 LOCOMOTIVES DIESEL- 0
SPECIALLY DESIGNED
FOR MININO OPERATIONS
1361 9033000000 LOOP HEAD 3
137 9033000000 LOOP, ZEIS HAND 5
I3B 6903900000 MABOR FOR MAKING 3
CUPELS
139 8439100000 MACHINERY* MECHANICAL 0
$439390000 APPLIANCES FALUNO UNDER CUSTOMS TARlfF
$466930000 S439-FOR MINING USE
140 9(97900000 MACHINERY PARTS NOT 0
CONTAINING ELECTRICAL
CONNECTORS. INSULATORS,
COILS. ETC-FOR MINING USE
141 $474100000 MACHINES FOR SORTING. 0
$474900000 SCREENING, SEPERATTNO,
$474200000 WASHINQ, CRUSHING
CRJNDINO OR ETC & SPARES
142 260U10000 MAGNETITE J
2601200000
143 1303110000 MAGNETS 3
$303900000
144 9012100000 MAGNIFIER-APLANATIC & 3
9033000000 COMPUND
143 3310100000 MATTING-FOR FILTER 3
3310900000 USE IN SOLUTION TANKS
3311000000
146 740300000C METAL-MUNIZ 3
147 METAL DETECTORS 5
149 9013900000 METERS-ELECTRICAL VOLT 3
9022900000 GAS; LIQUID & ACCESSORIES
149 $474200000 MIXERS FOR REAGENT O
STORAGETANK5
130 7326192516 MOULD ERS-CHAP LETS, 3
57NDT5PRINO(feSTUD
131 6903900000 MUFFLES 3
132 4011990000 TYRES, INCLUDING OUTER 3
4013900000 COVERS. TUBES RINOS
ETC FOR EARTH MOVING
MACHINES
133 ACCORDING TO MATERIAL PACKING-ENGINE ETC 3
7 of 12
SERIAL ILS. CODE DESCRIPTION TAX RATES
NUMBER
15 •132390009 PAD - DIAMOND SORTING S
15. 4SZ39OTMI PAPER-WHITE STONE 3
DIAMOND SORTING*
SLACK GLAZED
IX 40I700000C PATACI1ES (RUDDER, S
VULCANISING)
ir 902780000C PH CONTROL EQUIPMENT 5
158 38231SOOOC PHOTOSORU 5
155 ACCORD[(.<3 TO MATERIAL PIPES, TDD ES & FITTINGS 5
I6C 780199000C PLUMBERS WIPING METAL 5
151 902S909C4Q POINTERS FOR WATER 5
CUAOEOUSSES
162 3920100000 POLY77IELENB 5
IUDES/5HEETS FOR M1NINO
I S3 &421310000 PRESSURE FILTER S
I6i ACCORDING TO MATERIAL PRESSURIZED TANKS 5
IRON. ALUMINIUM.
STEEL, PLASTIC*
ALLOYS
165 ACCORD1NGTO PROTECTIVE CLOTHING, S
MATERIAL 4 DESCRIPTION EQUIPMENT & SATEFY WEAR FOR MINERS
166 8413310000 PULSOMETERS S
167 4205000000 PUMP LEATHERS 5
165 8414100000 PUMPS & SPARES (AIR) 0
8414400004
8414900000
169 8413110000 PUMPS&SPAKES 3
8413310000 (LIQUIDS)
8413910000 -
17C 9025800000 PYROMETERS 5
171 7302100000 RAIL SWITCHES (NOT S
73023DCOOO ELECTRICAL) & OTHER
73029MM4 SPECIALIZED MATERIALS
7316000000 FOR JOININO/FDCING
RAILS
172 7302103000 RAILS s
173 6904100000 REFRACTORYDRICK& 5
3816000000 MORTAR.
17-S 6902900000 REFRACTORY BEUCKS AND 5
OTHER REFRACTORY
CONSTRUCTION MATERIALS
175 3816000000 REFRACTORY CEMENT AND 5
HARDNER
•176 6903900000 REPREACTORY PRODUCTS S
OTHERTHAN REFRACTORY
CONSTRUCTION MATERIALS
177 8548100000 RESTANCE5 5
8533100000
8533300000
173 8529400000 ROAD ROLLERS & SPARES Q
8431490000
179 3207130000 ROCK DRILLINO TOOLS 5
8207900000
8 of 12
ILS. CODE DESCRIPTION TAX RATES
SERIAL
NIIMDER
ISO S30S000HG ROPES • MANILA 5
III 2312100000 ROPES - STEEL HAULING 5
in 7312100000 ROPES-WIRE 5
I
in 4015900000 RUBBER-OIL SKINS 5
IS! 4004900000 RUBBER-PLATES It STOPPERS 5
IS} 4014990000 RUDDER-SEAT PROTECTORS 5
ISO 4017000000 RUBBER* VALVES 5
IS7 8481400000 SAFETY VALVE 5
ISS 7212200000 SCREENING-PERFORATED 5
t 7212300000 STEELPLATES
l in 7314300000 SCREENING-WIRE MESH 5
I
IK 7403220000 SCREENING-WIRE MESH 3
PHOSPHOR BRONZE
101 7314200000 SCREENING-WIRE MESH, 5
AGATE STEEL
]» 8474900000 SCREENS-LEMANIT 0
POLYURETHANE SLOTTED
193 7326909000 SCREENS FOR VIBRATORY s
CONVEYORS
194 732620000C SHACKLES FOR. WIRE s
7315190000 ROPES
195 8429510000 STEEL SHOVELS-MINING 3
8431410000 (PARTS)
194 8530100000 SIGNALING EQUIPMENT 5
8531100000 ELECTRICAL
8531200000
8531800000
I
197 2505100000 SILICA, FINELYGROUND 5
2505900000
I9S 4805100000 SILICON CARBIDE 5
4805200000 ABRASIVE GRAINS
4805300000
199 3910000000 SILICONES 3
200 7104920000 SILVER WIRE (PURE) 3
FOR ASSAYING
732(200000 SOCKERS FOR WIRE TOPES 3
201
203 3214900000 SOLUFtX CEMENT FOR 5
UNATEX RUBBER
203 3814000000 SOLVENT KT1 FOR S
CLEANING AIR
COMPRESSOR INTER*
• I
COOLERTUBES
2M 7317000000 SPIKES---DOO 3
\ 20} 7314)20000 STAINLESS STEEL SCREEN 3
CLOTH
204 1108120000 STARCH-MAtZ£(R£AGENT) J
203 8404100000 STEAM i: THER VAPOUR 3
8404200000 POWER UNITS iPARTS
8404900000
' _ " 84172190000
8402900000
20S 7214500000 STEEL-ANGLE IROHCHANNBL IRON BARS &
PRODUCTS FORM1NING 5
7215900000
7214100000
7214990000
9 of 12
SERIAL US. CODE DESCRIPTION TAX RATES
NUMBER
7218610000
7308900000
7216600000
7227800000
20$ 7219120000 STEEL-NfiLD 5
7219130000
7219140000
210 7336110000 STEELBALLSFOR 5
ICUING (GRINDING
MEDIA)
211 7228800000 STEEL-DRILLS-ALL KINDS 5
AND SECTIONS
212 7227100000 STEEL-HIGH SPEED TOOL 5
7228100000
213 7214100000 STEEL-MILD OARS FOR 5
7214:00000 WNFORONO CONCRETE
FOUNDATIONS
214 7223904000 STEEL-MILD TOOL 5
2b 7113100000 STEEL-ROLLER JO ISIS J
72)3200000 [NOT BEING BUUSTM
MATERIALS)
2b 7303800000 STEEL-SETS AND STEEL¬ S
WORKS FOR9HAFTS
ll'i VUSIOAX* STEEL STUDS i
218 7314200400 STEEL-WIRE MESH FOR 5
REINFORCING CONCRETE
FOUNDATIONS
218 7323100000 STEEL WOOL S
220 7303800000 STEELWORKS, FABRICATED s
FOR ORE TRANSFER
STRUCTURES
221 85O7I0000C STORAGE BATTERIES 5
8}07900000 ELECTRICAL PROTECTIVE
CIRCUITS & PARTS
222 3207200000 SULPHURIC ACID RESISTING ENAMEL 5
223 901310000C SURVEYING INSTRUMENTS 5
9015900000 AND PARTS
224 6307900000 9YSTOFLEX VANISHED S
COTTON
22} 8481100000 TATS, COCKS. VALVES ft S
M81800000 SIMILAR APPLIANCES ft
PARTS
22} 3814000090 TAR SOLVENT 5
223 8091200000 TIN INGOTS 5
228 USSmXKK 'toggles S
228 >467110000 TOOLS USED IN THE MINING INDUSTRY s
8467390000 INCLUDING HAND TOOLS
3467910000
S4S799CCOC
----8460H 4000
3460900000
3466930000
>465100000
8465890000
3466920000
10af.12
SERIAL ILS.CODE DESCRIPTION TAX RATES
NUMBER
S20340000C
73181500*
8204110000
82041200a
820720000C
82MU000C
82M12000C
820110000C
82019000)0
22021000a
8202210000
8202220000
82051000a
8205200000
83031000a
82034000a
230 8716400000 [BAILERS AND PARTS S
87162000a [HOT MECHANICALLY PROPELLED
231 84831000a IHANSM1SSION SHAFTS, S
84836000a CRANKS, PUTN SHAFTS,
84832000a BEARINGS, CHARS AND
GEARINO, FLYWHEEL PULLEYS BLOCKS &
FARTS
233 84111100a TURDUINES & PARTS 3
84119900a
84121000a
84122000a
233 86080000a TURNTABLES (RAILWAY S
AND TRAMWAY)
234 82032000a TWEEZERS, PICKERS s
233 82072000a TWISTDRILL 3
236 48232000a UNIVERSAL INDICATOR PAPERS 3
237 38231200a UNIVERSAL JNDICATORSOUmON 3
23! 26034000a VANNER BRUSH, BLADE 3
22032000a HAIR&NYLON
233 27121000a VANNERGREASE. 5
27101163a SHOWDOWNS NO. 131
240 32121000a VARNISH INSULATING 3
32129000a
241 72103000a VENTILATION DUCTTNO 3
72)0200020 SHEET-FORMINB
VENTILATION
243 90361000a WATER GUAQES & PARTS 3
90262000a
243 90269000a WATER OUAGES, RINGS 3
244 90318000a WEIGHIOMEIERSFOR S
CONVEYORS
11 of 12
SERIAL tt& CODE DESCRIPTION TAX RATES
NUMBER
24‘ UtftKWO WELDING EQUIPMENT 5
3515900000 INCLUDING ELECTRODES,
53I11COOOO SOLOERSANOPLUX
3311900000
3810100000
246 9022190000 X-RAY EQUIPMENT. 5
9022900000 SPARES & FILM
3701(00000
347 2902410000 XYLENE 5
2902440000
248 7903100000 ZINC DUST & PREPARED 5
ziNcousr
249 7901200000 zinc moms S
250 7904000000 ZINC SHAVINGS 5
7907000000
251 MONfrORINO EQUIPMENT INCLUDING 5
ACCORDING TOSYSTEM COMPUTERISED DISPATCH TRACKING
EQUIPMENT/ SYSTEM & CCTV
252 ACCORDING TO MATERIAL BULK PACKAGING DAOS 5
12 of 12
In ease of -reply the Customs Division Form No. 80
number and date of this
letter should be quoted
Customs Division of ,
My Ref, No. JH/MINEfl- Ghana Revenue Authority
' Fax No_.0302-666716. P. O. Box 68
ACCRA ■
REPUBLIC OF GHANA Tel: 233-302-675701-9
j October 2012
See Distribution
9th EDITION OF mimtmg LTST
Attached please find the 9th Edition of the Mining list comprising of two hundred and
fifty three (253) items dated 3 September 2012 for your guidance.
Please acknowledge receipt
Commissioner
Distribution:
Ministry of Finance and Economic Planning
Ministry of Trade and Industry
Ghana Chamber of Mines
Ghana Minerals Commission
Commissioner, Domestic Tax Division
Gateways Services Limited
BIVAC International Ghana Limited
Ghana'Link Network'Servicra'Umited............
Webb Fonteine Ghana Limited
Inspection & Control Services Limited
Ail-Deputy Commissioners, Customs Division, Ghana Revenue Authority
Assistant commissioner. Imports and Deports, Customs Division
All Ports-ancTStations -------
CD
Commissioner General, Ghana Revenue Authority
GHANA REVENUE AUTHORITY
PREAMBLE TO THE 9th EDITION OFTHE MINING LIST *4
The3td Edition of the Mining List, published in 1970 comprised items
imported under the General Concessionary and Duty-Free tariffs. The rates of
duty at that time were either ‘free* or 5 per cent.
2. Between 1970 and July 1977 rates of duty applying to the Concessionary
Tariff increased from 5 per cent to 20 percent and the tariffs were renumbered
from B.206(2) to B.205(2). An Import License Levy was also introduced.
During this period the General Rate had for many items been amended to
permit duty-free importation.
Hence, as at July 1977 the Mining List Concessionary Tariff was no longer
being used to support clearance of those items where the General Rate was
lower than 20 per cent, and items could accordingly be more favourably
considered under the General Rate tariff
3. The July 1977 Budget retained all existing Duty-free tariff concessions (F.63
and F.68), but increased General Rate duties to either 35 per cent or 60 per
cent for foe majority of imports. In the same budget, the Concessionary Rate V
was again increased from 20 per cent to 35 per cent and the Tariff again re¬
numbered from B.205(2) to B.203(23). The Import Licence Levy was
discontinued.
4. The successive changes to tariff numbers and rates of duty, coupled with
changes in the materials and equipment used by the various mines since 1970
made it necessary to produce a 4“ Edition of the Mining List, which was duly
checked and approved by foe Comptroller of Customs and Excise on 12th
February, 1981. •
5. Between 1981 and 1989 General Rate Duty-Free and Concessionary Tariff
Rates and structure were extensively amended. Over the same period, it
became apparent due to ongoing developments in Mining Techniques and
mechanization, that the Mining List required rationalization and
simplification.
6. A 5th edition of the list was prepared and came into effect on 1st January,
1991. This revision was necessitated by foe promulgation of the Minerals and
Mining'&Hwrl98fi'(PNDS'Lawi53-)rJ0nder-Section-2?-^a)-aH-iteins------ ---
contained in the list should be admitted free of taxes. The Edition reduced the
number of mining list entries from 749 to 316 by incorporating mining items
of like nature into more appropriate generalized mining headings.
r
7. As a result of (a) the introduction of technological changes in mineral
processing; (b) die increase in gold mining companies working within Ghana;
(c ) taking cognizance of the national and international economic
environment; (d) the changes that are taking place in die structure of the
mining industry worldwide; (e) while grouping items of a like nature under
more appropriate mining headings, it became obvious that there was the need
to periodically revise the list.
8. A 6th edition of the list was accordingly promulgated on March 1,1995. This
Edition reduced the number of Mining List items from. 316 to 286.
9. Further to review proposed inparagrsph 7, the 7th Edition of the list was
promulgated on March 24,1997, having 269 items.
10. Again in line with the spirit of these revisions, the 8th Edition of the list which
reduced the number of items from 269 to 252 was promulgated in 2000.
11. This 9th Edition of the list comprising of253 items is hereby approved under
the following conditions
a. hi line with Paragraph 7 the list will now be reviewed annually in
September to which end the mining companies are expected to submit
proposals to the Ghana Revenue Authority for consideration by August
every year.
b. Items that are not included in this list will not attract the Concessionary
Tarifft rates.
c. A new item, SEALS has been added to the list.
d. The list is intended for the use of Mining Companies only.
SIGNED BY...............
rnmmicfitnnftr GtfffayftTof Ghana Revenue Authority
GEORGE BLANKSON
__-P-QjjMjSSjgl.NEaiGENEBAi
GHANA REVENUE AUTHOfftT?
APPENDIX E
CURRENT VAT MOU
ikutvib ii'i ft&a fct
^v'vw'' (////M fyuz&v/fol a fej.
VAT SERVICE AMD NEWMONT GHANA
REPORT OF
WORKING COMMITTEE FORMED TO DISCUSS SCOPE OF
VAT/NHIL RELIEF GRANTED NEWMONT GHANA
1.0 INTRODUCTION
A committee with membership drawn from the VAT Service and Newmont
Ghana (Newmont) was constituted in July 2007 by the Management of the
two Institutions to discuss and resolve the differences between them (the
VAT Service and Newmont) with respect to the scope of VAT/NHIL (VAT)
relief granted to Newmont in accordance with the Investment Agreement
(which is an Agreement between the Government of the Republic of
Ghana and Newmont Ghana Gold Limited, Goldem Ridge Resources
Limited and Rank Mining Company Limited that was ratified by Parliament
on 24th December 2003).
Section 6.2 of the Agreement provides, inter alia, that Newmont shall be
exempt from the payment of VAT on ail items they import and for all
foreign and locally purchased of services and supplies to the extent used
in connection with operations.
However, fn administering the said Agreement, officers from the two
institutions have interpreted Section 6.2 differently. This has resulted in
disagreement between the two institutions with respect to the meaning of
the phrase to the extent used In connection with operations and for
that matter the scope of VAT relief to Newmont. Thje Committee was,
therefore, constituted to resolve these differences.
2.0 MEMBERSHIP
The Committee was made up of seven (7) members as .follows:
1. Joseph Qbeng-Yeboah (Chairman) . VAT Service
2. Edmund Tetteh Kodjoe (Member)’”* Vai service
3. Victor Brew (Member) VAT Service
4. Seidu Ahmed Owusu (Member Secretary) VAT Service
5. Patrick Brannan (Member) Newmont
6. Edwin Aliotey Acquaye (Member) Newmont
77Ebenezer Kwesi Brace (Member) “ “-Newmont---
3.0 SCOPE OF WORK
Based on the Issues summarized in the introduction above, the Committee
decided on its scope of work as follows:
interpretation of the meaning of “operations" as defined in the
Investment Agreement;
II. application of the Investment Agreement relating to VAT including
discussions on the demand notices issued by VAT Service to
Newmont;
III. release of the automated VAT Relief Purcha'se Order (VRPO)
stationery to Newmont; and
IV. discussion of the work done by Research, Monitoring and Planning
Department of VAT Service in respect of the usage of VRPOs by
Newmont. !
4.0 DISCUSSIONS
The Committee started sitting on 31st July, 2007 and, subsequently met
twice in a week - Wednesdays and Fridays. The venues for the meetings
alternated between the VAT Service and Newmont. The first item
considered was the meaning of “operations" as defined in the Investment
Agreement. j
4.1 OPERATIONS
The Committee began by discussing the meaning of “operations".
There was however, no consensus. Newmont explained
"operations" to mean (as contained in section 1.27 of the
Agreement) all activities and transactions conducted by or on behalf
of Newmont with respect to, under or incidental! to this Agreement
including but not limited to Exploration, Development, Production
and Reclamation and the financing of any Of them. Although
Newmont agreed that section 1.27 does not give: blanket exemption
for any potential activity that Newmont will carry out, they insisted
that current activities being carried out by their companies are
related to mining and are therefore, either operational activities or
incidental to operations. ‘
The VAT Service on the other hand, stated that they understood
“operations* differently. The VAT Service position on “operations" is
that, although the definition is not limited to Exploration,
Development, Production and Reclamation, "operations" does not
The VAT Service stated further that in its opinion, the other
incidental activities should take their colour from "... Exploration.
Development, Production and Reclamation..." as captured under
Section 1.27 of the Agreement. Furthermore, jlhe VAT Service's
view was that the phrase "to the extent used in connection with
operations" in Section 6.2 of the Agreement implies that there is a
limit to the scope of VAT relief to Newmont, and that, to qualify for
relief from payment of VAT, the activities conducted should be in
connection with or incidental to operations. In the opinion of the
VAT Service this position is In conformity with Section 24 of the
VAT Act, Act 546 of 1998 which states inter alia that input tax Is
deductible if it is used wholly, exclusively and 'necessariiy in the
course of business of the trader.
In view of the fact that the Committee could not reach consensus
with respect to the meaning of "operations’', the Committee decided
to move on by considering the next item under the scope of work. It
was thought that reviewing the specific items identified by the VAT
Service would assist in developing a functional definition of
operations.
4.2 SCHEDULE OF SPECIFIC ITEMS REVIEWED .
Prior to the setting up of the Committee, the VAT Service
considered certain transactions by Newmont to be outside the
scope of relief from payment of VAT taking cognizance of the
meaning of “operations" as defined in the Investment Agreement
(see Appendix 1 for details of the transactions). :
With regard to catering and camp management services, Newmont
explained that the mine site is a remote location and that facilities
such as catering and camp management need to be provided to
enable their employees live and work at the site. Newmont has thus
contracted All Terrain Services Limited (ATS) tb provide catering
and camp management services (laundry, cleaning, repair and
maintenance etc).
With respect to domestic appliances/supplies, it was explained that
accommodation at the site need to be furrlished with those
appliances to enable the workers stay and work for the company.
-The-appllances-befong-to-the-company-and-inot---the-indMdual---
workers and are therefore not to be carried away by the latter
whenever they leave the mine site.
With regard to the miscellaneous expenses, these are items which
-do-not-faH-uRder-either-of-the-twe-speetfiG-catdgori&s-above-and---
therefore will need to be addressed on the individual transaction
basis.
Following the review of the specific items and to understand the
explanation provided better, the Committee decided it was
3
necessary for members (especially the VAT Service team) to
undertake a trip to Newmont’s mine site at Ahafo in order to
familiarise themselves with the mine operations.
4.3 THE MINE TOUR
The Committee members undertook a mine tour to the Ahafo site
from 26lh to 27,h August, 2007.
4.3.1 Findings
it was observed that Newmoni operates surface; mining with two (2)
pits. The pits are located few kilometers away from the processing
plant. Access roads have been constructed to link the site
operations and other facilities.
All Tenrain Services (ATS) is responsible for the management of the
camp. They undertake cleaning and laundry services at the site.
They also control access to the camp accommodation and handle
the keys to those rooms. ATS prepares food for the workers without
selling to them. All mine workers resident at the camp are entitled
to free meals three (3) times daily. Workers who hre not resident are
entitled to a meal each per shift worked. This is a case of an
outsourced operational activity. The rooms at jhe camp are each
furnished with orthopaedic mattress, television set, DSTV and other
electrical gadgets. Most of these items are provided to meet basic
needs of the mine workers resident at the site.
4.4 RECOMMENDATIONS
Based on the categorisation of the specific items reviewed the
Committee hereby makes the following recommendations:
1. Catering Services and Camp Management-.The Committee
recommends that the catering and camp management services
. suctiasJbnse provided under the ATS contraft qualifies as an _
operational activity under the investment Agreement and
therefore is entitled to the relief from payment pf VAT. VRPOs
may be properly issued.
_ . 2. Domestic Appliances/SuppUes-The Committee recommends
that the domesUc appliances/supplies at the Nfewmont
accommodations are provided to enable the workers to live and
work at the site. These items are necessary tO;provide basic
accommodations for workers in support of site operations and
are therefore entitled to relief from payment ofVAT. VRPOs may
be properly issued.
3. Miscellaneous Expenses- The Committee recommends that
items such as those under the miscellaneous expenses above
be reviewed based on their individual usage. Based on that
review the Committee recommends:
a. Items which do qualify for relief from payment of VAT:
i. bicycles
ii. road maintenance
iii. printing of sample tickets
b. Items which do not qualify for relief from payment of VAT:
i. 1000 caps
ii. black stars T. shirt etc
iii. chocolate wrappers I
iv. food items not covered by the catering contract
v. assorted wine '
vl. DSTV services
i
i 4.5 CONSIDERATION OF ITEMS ON THE DEMAND NOTICE
SCHEDULES
On the basis of the above recommendations and in consideration of
concessions granted Newmont under the Agreement die Committee
agreed that:
1. The following items on the demand notices, dated 5th
*. September 2006 and 16th March 2007, issued by the VAT
Service should be granted relief from payment of VAT.
. i. Catering and Camp management services
ii. Orthopaedic mattresses for site accommodation
1 iii. Washing machines for site accommodation
I iv. Various towels for site accommodation
. t
v. Television sets for site accommodation
vi. Bicycles (as means of trarlsport for security
personnel who patrol the site) |
vii. Road construction and maintenance at the site
viii. Printing of sample tickets file, labels for ore
samples) j
ix. Electrical appliances for the miipe site
The value of VAT waived for the above items as appeared in the
demand notices issued to Newmont by the VAT Service totals
£709,211,695.52 (see appendix 2 for the details).*
2. The following items on the demand notices, dated 5th
September 2006 and 16th March 2007, issued by the VAT
Service should not be granted relief from payment of VAT.
I. food items (other than catering services by AH
Terrain Services)
ii. wine
iii. caps for the launching of Ahafo site
iv. black stars T. Shirts
v. chocolate wrapper
The Value of VAT/NHIL waived for the above items as appeared in
the demand notices totals 029,797,105.44 (see appendix 3 for the
details).
The payment made so far by Newmont with respect to the demand
notices totals 0739,008,800.96 (copies of receipt attached)
I
This means a difference of 0709,211,698.52! (0739,088,800.96-
029,797,105.44) will be refunded to Newmont. ’
5.0 WORK OF RESEARCH MONITORING AND PLANNING (RM&P)
DEPARTMENT
The Committee considered the work done by RM&P department of VAT
Service during their monitoring visit to Newmont in • April 2007 on the
usage of VRPOs. The schedule prepared by RM&P during their monitoring
exercise has been incorporated in the schedule of specific items reviewed
under item 4.2 above. In consideration of the recorr)mendations of this
Committee, and based on work performed RM&P will idsue a report.
6.0 AUTOMATED VRPO STATIONERY
The Committee discussed the need for Newmont to implement the
automated VRPO system previously agreed on with the VAT Service. The
VAT Service has suspended the release of the automated VRPO
stationery pending resolution of the 5th September 2Cj06 demand notice.
Based on the recommendation for resolution of the September 5"1 2006
demand notice, the Committee further recommends the release of the
automated VRPO stationery to Newmont. ;
7.0 SUMMARY
Although the Committee could not reach consensus on the definition of
“operations", it made considerable progress by agreeing on the broad
categories as listed ifl'4'.4'ab'ove, Tfre‘calegories-wers-determined-based-
on Items listed In the demand notice schedules. The items reviewed in this
report and categorized as qualifying for VAT relief or otherwise are not
exhaustive.
In view of this broad agreement, the following are the Committee's
recommendations:
1. Thai a standing Committee with membership drawn from the
two institutions be formed with the aim of resolving any future
differences that may arise in respect of the Investment
Agreement.
2. That the categories of catering and camp management and
domestic appliances/supplies as defined in item 4.4 be relieved
from payment of VAT.
3. That the VAT Service refunds the amount of $4709,211,695.52
or GH07O.921.17 to the Newmont, representing the difference
between the payments made by Newmont p(er the Demand
Notices and the actual VAT amount due per the
recommendations of this Committee.
4. That the automated VRPO stationery be released to Newmont
In accordance with item 6.0 of this report.
5. That DSTV is not considered as a basic domestic appliance
and thus VAT must be paid on It.
8.0 CONCLUSION
The Committee members believe that the above recommendations if endorsed
will go a long way to improve good working relationship' between die two
institutions and enhance smooth implementation of the terms of Investment
Agreement as it relates to VAT.
The recommendations and work of the Committee, as documented in this report,
are without prejudice to the earlier agreement between the VAT Service and
Newmont. dated 20th August, 2004 on the scope of VAT relief for Newmont.
Submitted please.
Name
1. Joseph Obeng-Yeboah
2. Edmund Tetteh Kodjoe
3. Victor Brew
4. Seidu Ahmed Owusu
5. Patrick Brannan
5*
6. Edwin Allotey Acquaye
7. Ebenezer Kwesi Brace
APPENDIX 1
| CATEGORY DESCRIPTION [supplier _ [remarks
Catering and Camp Maintenance and All Terrain | Provision of
| Management catering services Services {'catering and camp
• services 1 management
■services at the
j mine site
Catering and All Terrain ;-do-
[ hospitality Services
• Christmas All Terrain -do-
I
i function Services
Catering Services All Terrain ;-do-
i Services
! Camp MGT and All Terrain rdo-
Catering services Services
! Domestic Orthopaedic African Domestic
> Appliances/Supplies mattress Foundation Gh. appliances/suppiies
provided at the site
i Ltd. (
Washing Novotec Ltd. 1
machines o
• • a
i Various towels UNA Agencies T-
! -do-
i 21" Sony Sogha Ltd. rdo-
\ Television
i Washing Edarick Ltd. ....
machines Q.
O
1
i Household Ederick Ltd ido-
I Electrical i
Appliances
(airconditioners,
fridoes. etcl
Bed UNA Agencies -do-
CIothes(sheets,
i pillows, etc)
CATEGORY DESCRIPTION _ SUPPLIER |REMARKS
Miscellaneous Phoenix bicycles Manjigo Ent. i For security patrol
Expenses etc [at the mine site
1000 caps for Epiters Epilage Used during the
Ahafo Services inauguration of
i Ahafo mine
Road Naachiaa Plant Access roads at
maintenance Ltd. Ihd site
Black stars T. Effects Ltd. Sojcial service
Shirt etc i
Printing of Speedy Publicity Us'ed to Identify soil
sample tickets samples
Sample tickets Speedy Publicity Us;ed to identify soil
t. printing satnples
1 Chocolate Erisaas Press Uded as promotion
i wrappers during inauguration
of^hafo mine
Food items Max Mart
Food items Asante Asante t
Ltd
Assorted wine Cape Trading i
Co. Ltd.
Grocery Max Mart
Grocery Koala Shopping
Centre
Bottled water Voltic Ghana Ltd i
!
i . . DSTV Multichoice
I
APPENDIX 2
1 CATEGORY ! DESCRIPTION I SUPPLIER VAT/NHIL WAIVED:
i
L . . * . J
| Catering services Catering and All Terrain Services 119,053.561.68:
i hospitality 1
Catering and Ail Terrain Services5 217,201.358.461
hospitality
Catering and All Terrain Services. 70,513,073.73
hospitality
Xmas function All Terrain Servicesj 129,769,211.30
Domestic Orthopaedic «
African Foundation' 480,000.00
Appliances/Supplies mattress Gh. Ltd.
Washing machine Novotec Ltd. - 10,682,607.00
Various towels UNA Agencies 890,550.00
21" Sony Television Sogha Ltd. 8,559,783.75
Honey moon African Foundation ; 840,000.00
L . . _ orthopaedic mattress Gh. Ltd. !
Ederick Ltd.
Washing machines t 4,950,000.00
Miscellaneous Phoenix bicycles etc Manjigo Ent. 13,110,000.00
Expenses
Road maintenance Naa Chiaapiant Ltd.) 113,524,536.00
Printing sample
Speedy Publicity 13,091,342.40
tickets i
t
Sample tickets Speedy Publicity 6,545,671.20
printing
TOTAL ■ 0709,211,695.52
APPENDIX 3
! CATEGORY | DESCRIPTION | SUPPLIER VAT/NHIL WAIVED
•
Catering services Food items Max Mart 768,205.44
i Food items Asante Asante Ltd 14,312.025.00
!
Cape Trading Co.
Assorted wine Ltd. 2,493,375.00
Miscellaneous 1000 caps for Ahafo Epiters Epilage 10,500,000.00
Expenses Services
Black stars T. Shirt Effects Ltd, 253.500.00
etc
Chocolate wrapper Erisaas Press 1,470,000.00
TOTAL 29,797,105.44
«•
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