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of mineral and has agreed to grant the Company a Gold Minig Lease on the terms and conditions hereinafter following:



NOW THIS AGREEMENT WITHNESSETH that:



1. GRANT OF SURFACE AND MINING RIGHTS

(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 hereto attached and shown edged red (hereinafter called "the Lease Area") together with mines, beds, seams, veins, channels and strata of gold and other associated mineral substances lying and being within and under the surface for a term of thirty (30) years from the date of this Agreement. Such term shall be renewable from time to time in accordance with PNDCL 153.



(b) The Government hereby grants to the Company the exclusive rights to work, develop and produce gold and other associated mineral substances in the Lease Area for the said term of thirty (30) years (including, the processing, storing and transportation of ore and materials together with the rights and powers reasonably incidental thereto) subject to the provision of this Agreement. Such term shall be renewable from time to time in accordance with PNDCL 153.



(c) The Company shall not, however, conduct any operations in a sacred area and shall not, without the prior consent in writing of the Minister conduct any operations:

(i) within 50 yards of any building, installation, reservoir or dam, public road, railway or area appropriated for railway; or

(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) The Company shall commence commercial production of gold within two (2) years from the date of this Mining Lease.



(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 customay rights and privileges of persons to hunt and snare game, gather firewood for domestic purpose or to collect snails.



[stampe] LAND REGISTRY NO [handwritten] 2033/1994(f) The public shall be permitted at their sole risk to use without carge, any road constructed by the Company in the Lease Area in 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 area enclosed for mining operations.



(g) Nothing contained in this Agreement shall be deemed to confer any rights on the Company conflicting with provision contained in the Minerals and Mining Law, 1986 PNDCL 153 nor to permit the Company to dispense with the necessety of applying for and obtaining any permit or authority with the Company may be required by law or regulation to obtain in respect of any work or activity proposed to be carried out hereunder.



2. GRANT OF RIGHTS TO THIRD PARTIES IN THE MINING AREA:



(a) Subject to satisfactory arrangement between the Government and the Company, the Government shall grant the first option to the Company to work mineral other than gold discovered in the Lease Area.



(b) Failling 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 in the 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 from time to time, any part which may be required for any state public purpose whatsover, provided that:

(i) The parts so excluded shall not habe 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 of the Lease Area subject to this Agreement except that no mining operations shall be conducted on the parts so excluded.

(iii) 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 or on which active operations have commenced or are in progress (such as digging, construction, installation or other works realted to gold mining) but, in lieu thereof, a part equal in area to any such part shall be excluded for such public purposes, and

(iv) The Governement shall not take to itself or grant to third