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WHEREAS:





The Government is desirous of developing its mineral resources in such


as will ensure that the maximum possible benefits accrue to the nation from




the exploitation of minerals and has agreed to grant the Company a Mining Lease


the terms and conditions hereinafter following:


NOW THIS AGREEMENT WITNESSETH that;


1. GRANT OF MINING RIGHTS


(a) The Government hereby grants to the Company mining rights


ALL that piece of land described in the schedule hereto and mon








particularly delineated on the Plan attached and shown edged


(hereinafter called "the Lease Area") together with mines,


seams veins, channels and strata of gold, diamonds and


metals lying and being within and under the surface for a term


fifteen (15) years from the date of this Agreement. Such term shall


be renewable from time to time in accordance with the Minerals


and Mining Law, 1986, PNDC. 153;


(b) The Government hereby grants to the Company the exclusive rights


to work, develop and produce gold, diamonds and base metals in


the Lease Area for the said term of fifteen (15) years (including,


the processing, storing and transportation of ore and materials


together with the rights and powers reasonably incidental thereto)


subject to the provisions of this Agreement;





LAND REGISTRY NO.


(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 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) The Company shall commence commercial production of gold,


diamonds and base metals within two (2) years from the date of


this Mining Lease. , -


(e) The Company shall conduct its operations in a manner consistent


with good commerdal mining practices so as not to interfere


unreasonably with vegetation in the Lease Area or with the


customary rights and pr .leges of persons to farm, hunt 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, 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 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 Law, 1986, P.N.D.C.L. 153 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 by law or regulaten to obtain-in respect of any work or


activity proposed to be carried out hereunder.


2. GRANT OR 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, diamonds and base


metals discovered in the Lease Area.


(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, diamonds and base


metals in the Lease Area, provided that any such activity shall not


unreasonably interfere with the rights granted to the Company


hereunder.


3. POWER OF GOVERNMENTTO EXO UDE 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 exduded shal not have a surface area in the


aggregate greater than ten percent of the Lease Area.


(ii) Any parts of the Lease Area so exduded 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 l ease 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 related to gold, diamondsand base metals mining)


but, in lieu thereof, a part equal in area to any such part


shall be excluded for such public purposes; and


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


parties the right to mine gold, diamonds and base metals


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


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 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, safety 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 Company shall mine and extract ore in accordance with


paragraph 5(a) herein utilizing methods which include dredging,


quarrying, pitting, trenching, stoping 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:-


(ii) 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 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.


(f) 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 of the Lease Area


may not be prevented or prejudiced.


6. NOTIFICATION OF DISCOVERY OF OTHER MINERALS:


(a) The Company shall report forthwith to the Minister, the Chief


Executive of the Minerals Commission, the Chief Inspector of Mines


and the Director of Geological Survey, the discovery in the Lease


Area of any other mineral deposits apart from gold, diamonds and


base metals 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,


diamonds and base metals except where they are unavoidably


linked with the production of gold, diamonds and base metals.


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 Chief Inspector of Mines.


(b) The Company shall provide the Director of Geological Survey with


such samples from the Lease Area as he may from time to time


reasonably request, and shall keep such samples as he may be


directed to do so by the Chief Inspector of Mines.


8. HEALTH, SAFETY AND ENVIRONMENTAL PROTECTION:


(a) The Company shall comply with all such reasonable instructions as


may from time to time be given by the Chief Inspector of Mines for


securing the health and safety of persons engaged in or connected


with the operations hereunder.


(b) 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.


POWER OF CHIEF INSPECTOR OF MINES TQ 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, to:


(i) endanger the health or safety of persons, or


(ii) endanger the environment, or


(iii) cause harm or destruction to potable water; or


(rv) result in damage to mining equipment or other structures or


installation;


the Chief Inspector of Mines, shall after giving the Company reasonable


notice, execute any works which in his opinion are necessary and


practicable in the circumstances and the costs and expenses of such


works shall be borne by the Company.


10. LIABILTTY FQR 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.


(b) The Company shall at all times 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 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 maximum


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 quota permitted by the Government.


(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 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 agendes located in Ghana owned by Ghanaian citizens or


companies organized pursuant to Ghanaian law, including but not


limited to, insurance agendes, 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


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, Chief Executive of the Minerals Commission and the


Director of Geological Survey.


(b) The Company shall maintain at the said offices copies of all reports


including interpretations dealing with gold, diamonds and base


metals and other precious minerals 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 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, Chief Executive of the Minerals Commission and the Director


of Geological 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.


16. FINANCIAL RECORDS:


(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


shall show all revenues received by the Company from all sources


including its operations hereunder, as well as all its 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) The Company shall furnish a report each quarter, to the Minister,


the Chief Inspector of Mines, the Chief Executive of the Minerals


Commission and the Director of Geological Survey, in such forms as


may from time to time be approved by the Minister, regarding the


quantities of gold, diamonds and base metals 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.


(b) The Company shall furnish a report each half-year to the Minister,


the Chief Inspector of Mines, the Chief Executive of the Minerals


Commission and the Director of 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 Chief


Inspector of Mines 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 by the Minister to the


Chief Inspector of Mines, the Chief Executive of the Minerals


Commission and the Director of 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.


(d) The Company shall furnish the Minister, the Chief Inspector of


Mines, the Chief Executive of the Minerals Commission and the


Director of Geological Survey not later than three (3) months after


the expiration or termination of this Agreement, with a report


giving an account of 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 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 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.


(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 Ghana 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, the Chief Executive of the Minerals Commission and the


Director of Geological Survey 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;


(ili) to inspect and check the accuracy of the weights and


measures 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 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


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 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 review ) at


the rate of 4185,000.00 (one hundred and eighty five thousand


cedis i.e. (45,000 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.


(ii) in the event of a surrender of any part of the Lease Area


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.


21. ROYALTIES:


(a) The Company shall pay to the Government royalty as prescribed by


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 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 pay as penalty for any late payment of any amounts


due to the Government hereunder, an additional amount calculated


at the Bank 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 the stocks of


gold, diamonds and base metals 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 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.


13. 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 Law 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:


(a) The Company may surrender at any time and from time to time, by


giving not less than three 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 event that the Company fails to do so, the


Minister shall make such part and everything 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


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 part or be included in


the calculation of the area of the retained part.


(d) 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 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


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 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 three (3) months 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


(i) 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 the conditions hereof (including any dispute as to the


calculation of payments by the Company to the Government


hereunder), and the Company shall, within such period as aforesaid


refer the 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.


(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.


9. ASSETS ON TERMINATION OR EXPIRATION:


(a) Upon the termination or expiration of this Agreement, immovable


assets of the Company in the Lease Area and all other


appurtenances, pits, trenches and boreholes shall on the effective


date of termination or expiration, become the property of the


Government without charge.


(b) All materials, supplies, vehicles and other movable assets of the


Company in the Lease Area which are fully depreciated for tax


purposes, shall become the property of the Government without


charge on the effective date of termination or expiration. Any such


property which is not then fully depreciated for tax purposes shall


be offered for sale to the Government within sixty (60) days from


the effective date of such termination or expiration at the


depreciated cost. If the Government shall not accept such offer


within sixty (60) days, the Company may sell, remove or otherwise


dispose of all such property within a period of one hundred and


eighty (180) days after the expiration of such offer. All such


property not sold, removed or otherwise disposed of shall become


the property of the Government without charge.


(c) 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 does 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.


(d) 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.


e) 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 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 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.


) 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.


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 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 shall be in addition to 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 employee, other than a citizen


of Ghana shall engage in political 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 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, 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 ft would in the ordinary course of registered


mail be delivered to the addressee.


35. ARBITRATION AND SETR£MEW 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 dspute provided that at the instance of either of


the parties any such depute 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 proedings.


(c) Nothing in clause 35(a) or 35(b) shall prevent either of the parties


horn 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 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:


This Agreement shall be governed and construed in accordance with the


Laws of Ghana.


THE SCHEDULE ABOVE REFERRED TO


All that piece or parcel of land containing an approximate area of 36.34 square


kilometres lying to the North and South of Latitudes 6°15'00" and 6°20‘44"; East


of Longitudes 2022’40", 2923’33", 2°23537, 292404" and 292415"; West of


Longitudes 2021’22", 2921’45", 2021’54" and 202220" in the Bibiani-Anhwiaso-


Bekwai District of the Western Region of the Republic of Ghana which piece or


parcel of land is more particularly delineated on the plan annexed hereto for the


purposes of identification and not of limitation


 6“21



























































Proposed Open P:











Mine Plant

















Tallings Storage


VED 6018





may 2004





Water Oam




















695000.mN. Waste Rock Jump











Chirano Mining Lease Appcation


(36.34 km) j











Haul Road








19 MAN 2004





Chrano Gold Mines ud


. AccRA 2 CHIRANO PROJEer





PROPOSED MINING LEASE


ANO INFRASTRUCTURE














6*15'


THIS IS THE PLAN REFERRED TO


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





MRS. CECILIA BANNERMAN, the Minister


of Mines 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:














CHIEF DI RECTOS.


ministry •B MINES


SIGNED BY THE WITHIN-NAMED


CHIRANO GOLD MINES 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 ] MANAGING DIRECTOR





the presence of:














DIRECTOR/SECRETARY


 OATH QF PROOF


IGeov9e 84---- of ACCRA make oath and say that


on the 8 day of AP • • - 2004 I was present and saw


MRS. CECILIA BANNERMAN, Minister of Mines duly execute the Instrument


now produced to me and marked "A" and that the said MRS. CECILIA





















































CERTIFICATE OF PRQQF


On the \ “aday ofVN 2004 atOSg’clock in the"eTR


noon this instrument was proved before me by the Oath of the within-named


Heovg € 87 As--- to have been duly executed by


.2’ named MRS. CECILIA BANNERMAN for and on behalf of "the


the within-nidm _-=---==-.


Government" of the Republic of toja r herein.











RE* OF LANDS GHANA


 2004





















































MINING LEASE




















TERM: FIFTEEN (15) YEARS





COMMENCEMENT: 8


EXPIRY DATE: 7





THIS


FILE NO: PL.2/56





SOLICITOR OE--


THE SUPREME COURT








GHANA





2. ya


N ACCORDANICE wT i ECTION 12 QP THE STAMP


ACT 1965 I C!a ndy h IT IN MY OPINION THIS


INSTRUMENT IS CH!!ARGEABLE WITH A DUTY OF








ACCRA 20