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This MINERAL PRODUCTION SHARING AGRIEMENT ("Agreel4ent") ip made

'l

by

day of lllfl{ {'i i lll

and entered into in Quezon City, Philippines, this



---



and between:



THE REPUBLIC OF TIIE PIIILPPINES, herein referred to as the

GOVERNMENT, represented in this act by thr: Secretary of the Department of

Environment and Natural Resources, with offrces at the Department of Environment and

NaturalResources Building, Visayas Avenue, Diliman, Quezon City



and



CENTRAL PALAWAN MINING



& INDUSTRIAL CORPORATION, A



corporation duly organized and existing under the laws of the Republic of the Philippines,

herein referred to as the CONTRACTO& with office at 5885 Zobel Roxas Street, Makati

City and represented in this act by its President, Benito Q. Bengzon, as authorized by its

*A')

Board of Directors (please refer to ANNEX



WITNESSETH:

WHEREAS, the 1987 Constitution of the Republic of the Philippines provides in Article

)flI, Section 2 thereof that all lands of the public domain, waters, minerals, coal,

petroleum, and other natural resources are owned by the State and that their exploration,

development and utilization shall be under the fulI control and supervision of the State;



Sharing Agreement with Filipino citizens, or cooperatives, partnerships, corporations or

associations at least sixty per centum of whose capitalization is owned by such citizens;



WHEREAS, pursuant to Republic Act No. 7942, otherwise known as "The Philippine

Mining Act of 1993', which took effect on 09 April 1995, the Secretary of the

Department of Environment and Natural Resources is authorized to enter into Mineral

Production Sharing Agreements in furtherance of the objectives of the Government and

the Constitution to bolster the national economy through sustainable and systematic

development and utilization of mineral lands;

WHEREAS, the Government desires to avail itself of the financial resources, technical

competence and skill which the Contractor is capable of applying to the mining operations

of the project contemplated herein;

WHEREAS, the Contractor desires to join and assist the Government in the sustainable

development and utilization for commercial purposes of certain limestone deposits and

other associated minerals existing in the Contract Area ( as herein defined);

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WHEREAS, the Contractor has access to all the financing, technical competence,

technology and environmental management skills required to promptly and effectively

carry out ttre objectives of this Agreement.



NOW, THEREFORE, for



and in consideration of the foregoing premises, the mutual

covenants, terms and conditions hereinafter set forth, it is hereby stipulated and agreed as

follows:



SECTION



I



SCOPE

This Agreement is a Mineral Production Sharing Agreement entered into pursuant

The

primary purpose of this Agreement is to provide for the sustainable development

and commercial utilization of certain limestone deposits and other associated

mineral deposits existing within the Contract Area, with a1l necessary services,

technology and financing to be furnished or arranged by the Contractor in

accordance with the provisions of this Agreement. The Contractor shall not, by

virtue of this Agreement, acquire any title over the Contract/Mining Area without

prejudice to the acquisition by the Contractor of the land/surface rights through

any mode of acquisition provided for by law.



to the provisions of the Act and its implementing rules and regulations.



The Contractor shall undertake and execute, for and on behalf of the Government,

sustainable mining operations in accordance with the provisions of this Agreement,

and is hereby constituted and appointed, for the purpose of this Agreement, as the

exclusive entity to conduct mining operations in the Contract Area.



The Contractor shall assume all the exploration risk such that if no minerals in

commercial quantity are developed and produced, it will not be entitled tc;

reimbursement.



During the term of this Agreement, the total value of production and sale

minerals derived from the mining operations contemplated herein shall

accounted for and divided between the Govemment and the Contractor

accordance with Section VIII hereofl



SECTION



II



DEFINITIONS



As used in this Agreement, the following words and terms , whether singular or plural,

shall have the following respective meaning .



2.1



."Agto' refers to Republic Act No. 7942, otherwise known as the "Philippine

Mining Act of 1995".

Asreement means this Mineral Production Sharing Agreement.

Associated Minerals mean other ores/minerals which occur together with the

principal ore/mineral.

Bangko Sentral means Bangko Sentral ng Pilipinas.



,{



2.74



Director



Z.l5



Effective Date means the date of execution of this Agreement by the Contractor

and by the Secretary on behalf of the Government. In case an Exploration

Permit/Temporary Exploration Permit had been availed of by the Contractor, the

Effective Date of this Agreement shall be the date of issuance of said Exploration

Permit/Temporary Exploration Permit.



means the



Director of Mines and Geosciences Bureau.



2.16 Environment means all facets of



man's surroundings: physical, ecologicbl,



aesthetic, cultural, economic, historic, institutional and social



Z.l7



Exploration means searching or prospecting for mineral resources by geological,

geophysical and geochemical surveys, remote sensing, test pitting, trenching,

drilling, shaft sinking, tunneling, or any other rnelns for the purpose of determining

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the existence, extent, quality, and quantity of mineral resources and the feasibility

of mining them for profit.



2.18



Exploration Period shall mean the time period from the Effective Date of this

Agreement which shall be for two (2) years, renewable for like periods but not to

exceed a total term of six (6) years-sutrjecf to the pertinent-provisions-of the

implementing rules and regulations of the Act.



2.19



Force Majeure means acts or circumstances beyond the reasonable control of the

Contractor including, but not limited to war, rebellion, insurrection, riots, civil

disturbances, blockade, sabotage, embargo, strike, lockout, any dispute with

surface owners and other labor disputes, epidemics, earthquake, storm, flood, or

other adverse weather conditions, explosion, fire, adverse action by the

Government or by any of its instrumentality or subdivision thereo{, act of God or

any public enemy and any cause as herein described over which the aftbcted party

has no reasonable control.



2.2A



Foreiqn Exchanqe means any currency other than the currenoy of the Republic

the Philippines acceptable to the Government and the Contractor.



of



221



Government means the Government of the Republic of the Philippines or any

its agencies and instrumentalities.



of



2.22



Gross Output means the actual market value of the minerals or mineral products

from each mine or mineral land operated as a separate entity, without any

deduction for mining, processing, refining, transporting, handling, marketing, or

any other expenses. Provided, That if the minerals or mineral products are sold or

consigned abroad by the Contractor under C.I.F. terms, the actual cost of ocean

freight and insurance shall be deducted: Provided further, That in the case of

mineral concentrates which are not traded in commodity exchanges in the

Philippines or abroad such as copper concentrate, the actual rnarket value shall be

the world price quotation of the refined mineral products contained thereof

prevailing in the said commodity exchanges, after deducting the smelting ,refining,

treatment, insurance, transportation and other charges incurred in the process of



2.27



Mining Operations means mining activities involving exploration, feasibility study,

environmental impact assessment, development, utilization, mineral processing,

and mine rehabilitation.



2.28 Notice

or



means notice in writing, telex or telecopy (authenticated by answer back

confirmation received) addressed or sent as provided in Section 16.2 of this



Agreement.



2.29 Ore



means naturally occurring substance or material from which a mineral or

element can be rnined and/or processed for profit.



2.30 Pollution



means any alteration of the physical, chemical andlor biological

properties of any water, air and/or land resources of the Philippines, or any

discharge thereto of any liquid, gaseous or solid wastes or any production of

unnecessary noise or any emission of objecti
create or render such water, air, and land resources harmful, detrimental or

injurious to public health, safety or welfare or which will adversely affect their

utilization for dornestic, commercial, industrial., agricultural, recreational or other

legitimate purposes.



2.31



Secretary means the Secretary of the Department of Environment and Natural

Resources.



2.32



State means the Republic of the Philippines.



2.33 Work Program means a document



which presents the plan of major mining

operations and the corresponding expenditures of the Contractor in its Contract

Area during a given period of time, including the plan and expenditures for

development of host and neighboring communities and of local geoscience and

mining technology, as submitted and approved in accordance with the

implementing rules and regulations of the Act.



SECTION



III



TERM OF AGREEMENT

This Agreement shall have a term of twenty-five (25) years from Effective Date,

and may be renewed thereafter for another term not exceeding twenty five (25)

years. The renewal of this Agreement, as well as the changes in the terms and

conditions thereof shall be upon mutual consent by the parties. In the event the

Government decides to allow mining operations thereafter by other Contractor,

this must be through competitive public bidding. After due publication of notice,

the Contractor shall have the right to equal the highest bid upon reimbursement of

all reasonable expenses ofthe highest bidder.



Size, Shape, and Location of Contract Area. T'his Agreement covers a total area

of four thousand eight hundred ninety-six & 1067/10000 hectares (4,896.1067

has.), situated at Quezon, Palawan and bounded by the following geographrcal

coordinates (please refer to ANNEX "8" - 1:50,000 scale Location Map/Sketch



Plan),



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Provided, That any

the Contract Area.



Timetable for Exploration - The Contractor shall commence Exploration

activities not later than three (3) months after the Effective Date for a period of

two (2) years, renewable fbr like periods but not to exceed a total term of six (6)



to annual review and approval by the Director to evaluate

compliance with the terms and conditions of this Agreement: Provided, That

further renewal may be granted by the Secretary under circumstances as defined i1

the implementing rules and regulations of the Act.

years, subject



In



case where



a



Temporary Exploration Permit was issued, the Period of such

Temporary Exploration Permit shall be included as part of the Exploration Period

of this Agreement.



Work Programs and Budgets - The Contractor shall strictly comply with the

approved Exploration and Environmental Work Programs together with their

corresponding Budgets (please refer to ANNEXES "C" and "D").

The amount to be spent by the Contractor in conducting Exploration activities

under the terms of this Agreement during the Exploration Period shall be in the



aggregate

fbllows:



of not less than that



specified



for



each



of the Contract Years, as



For the Exploration Work Program:



lst Contract Year

2nd Contract Year



In the event of renewal of the Exploration Period, the amount to be spent every

year shall first be agreed upon by the parties.



In the event of termination of this Agreement, the Contractor shall only be obliged

to expend the pro-rata amount for the period of such Contract Year prior to

termination. If during any Contract Year, the Contractor should expend more than

the amount to be expended as provided above, the excess may be subtracted from

the amount required to be expended by the Contractor during the succeeding

Contract Years, and should the Contractor, due to unforeseen circumstances or

with the consent of the Government, expend less during aye&r, then the deficiency

shall be applied to the amount to be expended during the succeeding Contract

Years.



Relinquishment of TotaUPortion of the Contract Area - During the Exploration

Period, the Contractor may relinquish totally or partially the original Contract

Area. After the Exploration Period and prior to or upon approval of a Declaration

of Mining Project Feasibility, the Contractor shall firralb relinquish any portion of ,

the Contract Area not necessary for mining operations and not covered by any \

Declaration of Mining Project Feasibility.



5.4



Area - The final Mining Area shall not be more than five

thousand hectares (5,000 has.) for metallic rninerals and one thousand hectares

(1,000 has.) for non-metallic minerals. The Director may allow the Contractor to

hold more than one (1) final Mining Area subject to the maximum limits set under

the implementing rules and regulations of the Act: Provided, That each final

Mining Area shall be covered by a Declaration of Mining Project Feasibility

supported by a Mining Project Feasibility Study, Development/Utilization \\rork

Program and application for survey.

Final Mining



/

/



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Environmental Compliance Certificate. The Mining Project Feasibility Study and

Work Program are subject to approval by the Director. Failure of the Contractor

to submit a Declaration of Mining Project Feasibility during the Exploration Period

shall be considered a substantial breach of this Agreement.



5.7



Reporting



Periodic Reports - During the Exploration Period, the Contractor shall

submit to the Director through the concerned Regional Director, quarterly

and annual accomplishment reports under oath on all activities conducted in

the Contract Area tiom the Effective Date of this Agreement. The quarterll,

report shall be submitted not later than fifteen (15) days at the end of each

Calendar Quarter while the annual accomplishment report shall be submitted

not later than thirty (30) days from the end of each Calendar Year. Such

information shall include detailed financial expenditures, raw and processed

geological, geochemical, geophysical and radiometric data plotted on a map

at a minimum 1:50,000 scale, copies of originals of assay results, duplicated

sanrples, field data, copies of originals ltom drilling reports, maps,

environmental work program implementation and detailed expenditures

showing discrepancies/deviations with approved exploration and

environmental plans and budgets as well as all other information of any kind

collected during the exploration activities. All information submitted to the

Bureau shall be subject to the conlidentiality clause of this Agreement.



- The Contractor shall submit to the Director through the* \

concerned Regional Director, a final report under oath upon the expiration \

\

of the Exploration Period which shall be in the form and substance \J

comparable to published professional reports of respectable international t

institutions and shall incorporate all the findings in the Contract Area \

I

including location of samples, assays, chemical analysis, and assessment of Y

mineral potentials together with a geologic map of 1:50,000 scale at the

\. \minimum showing the results of the exploration. Such report shall also

Final Report



include detailed expenditures incurred during the Exploration Period. In

case of diamond drilling, the Contractor shall, upon request of the

Director/concerned Regional Director, submit to the Regional Office a

quarter of the core samples which shall be deposited in the Regional Oftice

Core Library for safekeeping and reference.



c)



Relinquishment Report

- The Contractor shall submit a separate

relinquishment report with a detailed geologic report of the relincluished area

accompanied by maps at a scale of 1:50,000 and results of analyses and

detailed expenditures, among others.



SECTION VI

DEYELOPNIENT AND CONSTRUCTION PERIOD

Timetable - The Contractor shall complete the development of the mine including.

the construction of production facilities within thirty six (36) months from the

submission of the Declaration of Mining Project Feasibility, subject to such

extension based on justifiable reasons as the Director may approve, upon

recommendation of the concerned Regional Director.

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Reporting



a)



Annual - The Contractor shall submit, within sixty (60) days after December

31 of each year, to the Director through the concerned Regional Director,

an annual report which states the major activities, achievements and detailed

expenditures during the year covered, including maps, assays, rock and

mineral analyses and geological and environmental progress reports during

the Development and Construction Period.



b)



Final Report - Within six (6) months from the completion of the development

and construction activities, the Contractor shall submit a final report to the

Director through the concerned Regional Director. Such report shall

integrate all information in maps of appropriate scale and quality, as well as

in monographs or reports in accordance with international standards.



SECTION



VII



OPERATING PtrRIOD

Timetable - The Contractor shall submit, within thirty (30) days before completion

of mine development and construction of production facilities, to the Director

through the concerned Regional Director, a Three-Year Commercial Operation

Work Program. The Contractor shall commence commercial utilization

irnmediately upon approval of the aforesaid Work Program. Failure of the

Contractor to commence Commercial Production within the period shall be

considered a substantial breach ofthe Agreement.

Commercial Operation Work Program and Budget - During the Operating Period,



the Contractor shall submit to the Director through the concerned Regional

Director, Work Programs and Budgets covering a period of three (3) years each,

which shall be submitted not later than thirty (30) days before the expiration of the

period covered by the previous Work Program.



The Contractor shall conduct Mining Operations and other activities fbr the

duration of the Operating Period in accordance with the duly approved Work

Programs and corresponding Budgets and any modification thereof shall be subject

to approval by the Director.

Expansion and Modification of Facilities - The Contractor may make expansions,

modifications, improvements, and replacements of the mining facilities and may

add new thcilities as the Contractor may consider necessary for the operations:

Provided, That such plans shall be ernbodied in an appropriate.\M-ork Program

approved by the Director.



Reporting

Quafierly Reports - Beginning with the first Calendar Quarter following the

commencement of the Operating Period, the Contractor shall submit, within

thirty (30) days after the end of each Calendar Quarter, to the Direct6r

thLrough the concerned Regional Director, a Quarterly Report stating the

tonnage of production in terms of ores, concentrates, and their

corresponding grades and other types of products; value, destination of sales

or exports and to whom sold, terms of sales and expenditures.



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b)



Annual Reports - During the Operating Period, the Contractor shall submit

within sixty (00) days from the end of each Calendar Y€ar, to the Director

through the concerned Regional Director, an Annual Report indicating in

sufficient detail:



b.1) The total tonnage of ore reserves, whether proven, probable, or

inferred, the total tonnage of ores, kind by kind, broken down between

tonnage mined, tonnages transported from the minesite and their

corresponding destination, tonnages stockpiled in the mine and

elsewhere in the Philippines, toilnages sold or committed for export

(whether actually shipped from the Philippines or not), tonnages

actually shipped from the Philippines (with full details as to purchaser,

destination and terms of sale), and if known to the Contractor,

tonnages refined, processed or manuf-actured in the Philippines with full

specifications as to the intermediate products, by-products or frnal

products and of the terms at which they were disposed;



b.2) Work accomplished and work in progress. at the end- of-rhe_ year in

question with respect to all the installations and facilities related to the

utilization prograrn, including the investment actually made or

committed;



b.3) Profile of work force, including management and stafi stating

particularly their nationalities, and for Filipinos, their place of origin

(i.e., barangay, town, province, region), and



b.4) Ownership of the Contractor, particularly with respect to nationality.

The Contractor shall also comply with other reporting requirements provided for

in the implementing rules and regulations of the Act.



be procured. The Bureau shall be furnished a copy of the said Sales Agreement

subject to confidentiality between the Bureau and the Contractor

Associated Mnerals - If minerals other than limestone deposits are discovered in

commercial quantities in the Contract Area, the value thereof shall be added to the

value of the principal mineral in computing the Government share.



SECTION IX



WORK PROGRAMS

Submission to Government - Within the periods stated herein, the Contractor shall

prepare and submit to the Director through the concerned Regional Director, a

Work Program and corresponding Budget for the Contract Area stating the

Mining Operations and expenditures which the Contractor proposes to carry out

during the period covered with the details and particulars set forth elsewhere in

this Agreement or in the supporting documents.



Government's Examination and Revision o1' Work Program - Should the

Government wish to propose a revision to a certain specific feature in the Work

Prograrn or Budget, it shall, within thirty (30) days after receipt thereof provide a

Notice to the Contractor specifying in reasonable detail its reasons thereforPromptly thereafter, the Government and Contractor will meet and endeavor to

agrse on the revision proposed by the Govemment. In any event, the revision of

any portion of said Work Program or Budget in which the Government shall fail to

notify the Contractor of the proposed revision shall, insofar as possible, be carried

out as prescribed herein. If the Government should fail within sixty (60) days from

receipt thereof to notiS Contractor of the proposed revisions, the Work Program

and Budget proposed by the Contractor shall be deemld to be approved.

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Contractor's Changes to Work Program - It is recognized by the Government and

the Contractor that the details of any Work Program may require changes in the

light of changing circumstances. The Contractor may make such changes:

Provided, That it shall not change the general objective of the Work Program.

Provided further, That changes which entail a variance of at least twenty

percentum (20%) shall be subject to the approval of the Director.

The Government's approval of a proposed Work Program and Budget will not be

unreasonably withheld



SECTION X

ENVIRONMENTAL PROTECTION AND MINE SAFETY AND IIEALTH



10.1 The Contractor shall manage its Mining Operations in a technically, financially,



to achieve the

provided

for under the

responsibilities

as

objectives

and

sustainable development

implementing rules and regulations of the Act,

socially, culturally and environmentally responsible manner



I0.2



The Contractor shall prepare a plan of rnining so that its damage to the

environment will be minimal. To the extent possible, control of pollution and the

transformation of the mined-out areas or materials into economically and socially

productive forms must be done simultaneously with mining;



10.3 The



10.4



Contractor shall submit an Environmental Work Program during the



An Environmental Compliance Certificate (ECC) shall be secured first by theq

Contractor prior to the conduct of any development works, construction of \

production facilities andlor mine production activities in the Contract



10.5



Ar-ea;



The Contractor shall submit within thirty (30) Calendar days after the issuance and

receipt of the ECC, an Environmental Protection and Enhancement Program

(EPEP) using MGB Form No. 16-2 covering all areas to be allbcted by

development, utilization and processing activities under this Agreement. The

Contractor shall allocate for its initial environment-related capital expenditures

approximately ten percent (10%) of the total project cost or in such amount

depending on the environmentaVgeological condition, nature and scale of

operations and technology to be employed in the Contract Area;



10.6 'Ihe Contractor shall submit,



within thirty (30) days prior to the beginning of

every calendar year, an Annual Environmental Protection and Enhancement

Program (AEPEP), using MGB Form 16-3, which shall be based on the approved

EPEP. The AEPEP shall be implemented during the year for which it was

submitted. To implement its AEPEP, the Contractor shall allocate annually three

to live percent (3%-5%) of its direct mining and milling costs depending on the

environmentaVgeologic condition, nature and scale of operations and technology

employed in the Contract Area;



10.7



The Contractor shall establish a Mine Rehabilitation Fund (N,m.F) based on the

tinancial requirements of the approved EPEP as a reasonable environmental

deposit to ensure satisfactory compliance with the ncommitments/strategies of the

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EPEP/AEPEP and availability of funds for the performance of the EPEPIAEPEP

during the specific project phase. The MRF shall be deposited as Trust Fund in a

government depository bank and shall be used for physical and social

rehabilitation of areas affected by mining activities and for research on the social,

technical and preventive aspects of rehabilitation;



10.8



The Contractor shall set up mitigating measures such as mine waste and mill

tailings disposal system, mine rehabilitation or p1an, water quality monitoring, etc.

to minimize land degradation, air and water pollution, acid rock drainage and

changes in hydrogeology;



10.9



The Contractor shall set up an Environmental and Safety Office at its minesite

marured by qualified personnel to plan, implement and monitor its approved EPEP;



10.10 The Contractor



of environmental safety and

health conditions in the Contract Area and shall strictly comply with all the rules

and regulations embodied under Mines Administrative Order No. MRD-51, Series

of 1991, otherwise known as the "Revised Mine Safety Rules and Regulations",



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1



shall be responsible in the monitoring



The Contractor shall be responsible for the submission of a final mine rehabilitation

and/or decommissioning plans including its financial requirements and

incorporating the details and particulars set forth in the implementing rules and

regulations ofthe Act.



Obligations of the Contractor:



To exclusively conduct sustainable Mining Operatiorrs within the Contract

Area in accordance with the provisions of the Act and

and regulations;



To



its



implementing rules



construct and operate any facilities specified under the Mineral



Agreement or approved Work Program;



To determine the exploration, mining and treatment process to be utilized in

the



Mining Operations;



To extract, remove, use and dispose of any tailings as authorized by



an



approved Work Program;



To secure all permits necessary

Operations;



or



desirable



for the purpose of Mining



To keep accurate technical records about the mining operations as well as

financial and marketing accounts and make them available to Government

representatives authorized by the Director for the purpose of assessing the

perforrnance and compliance of-the Contractor with-the-terms- of-this

Agreement. Authorized representatives of other Govemment Agencies may

also have access to such accounts in accordance with existing laws, rules and

regulations;



g) To furnish the Bureau all the data and information



gathered from the

Contract Area and that all the books of accounts and records shall be open

for inspection;



To allow access to Government during reasonable hours in inspecting the

Contract Area and examining pertinent records for purposes of monitoring

compliance with the terms of this Agreement;



To hold the Government free and harmless from all claims and a.ccounts of

all kinds, as well as demands and actions arising out of the accidents or

injuries to persons or properties caused by Mining Operations of the

Contractor and indemni$/ the Government for any expenses or costs incurred

by the Government by reason of any such claims, accounts, demands or

actions;



In the development ofthe community:



j,1) To



recogruze and respect the rights, customs and .traditions of

indigenous cultural communities over their ancestral lands and to

allocate royalty payment of not less than one percent (I%) of the value

of the gross output ofminerals sold;



j



2) To coordinate



with proper authorities in the development of the

mining community and for those living in the host and neighboring

communities through social infrastructure, livelihood programs,

education, water, electricity and rnedical seryices. Where traditional

self-sustaining income and the cornmunity activities are identified to be

present, the Contractor shall assist in the preservation andlor

enhancement of such activities,



3)



To allot annually a minimum of one percent (1%) of the direct mining

and milling costs necessary to implement the activities undertaken in

the development of the host and neighboring communities. Expenses

for community development may be charged against the royalty

payment of at least one percent (1%) of the gross output intended for

the concerned indigenous cultural community;



j.4)



To give preference to Filipino citizens who have established domicile in

the neighboring communities, in the hiring of personnel for its mining

operations. Ifnecessary skills and expertise are currently not available,

the Contractor must immediately prepare and undertake a training and

recruitment program at its expense;



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j 5) To



incorporate in the Mining Project Feasibility Study the planned

expenditures necessary to irnplement (.1) to (.3) of this Section,



In the development



of Mining



Technology and Geosciences:



k.1) In the course of its operations, to produce geological,



geophysical,



geochemical and other types of maps and reports that are appropriate in

scale and in format and substance which are consistent with the

intemationally accepted standards and practices. Such maps shall be

made available to the scientific community in the most convenient and

cost effective forms, subject to the conditiop that the Contractor may

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Rights of the Contractor

The Contractor shall have the right:



a)



To conduct Mining Operations within the confines of its ContractAvtining \

Area in accordance with the terms and conditions hereof and that it shall not

interfere with the rights of other Contractors/Lessees/Operators/ permittees;



of



possession of the contract Area, with full riglrt of ingress and egress

and the right to occupy the same, subject to surface and easement rightsa



To use and have access to all declassified geological, geophysical, drilling,

production and other data relevant to the mining operations;

To sell, assigq transfer, convey or otherwise dispose of all its rights, interests

and obligations under the Agreement subject to the approval of the

Government;

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To employ or bring into the Philippines foreign technical and specialized

personnel, including the immediate members of their families as may be

required in the operations of the Contractor" subject to applicable laws and



regulations: Provided, That if the employment connection of such lbreign

persons with the Contractor ceases, the applicable laws and regulations on

immigration shall apply to -them.Jverytime-fcueign-technologies-are utilized

and where alien executives are employed, an effective program of training

understudies shall be undertaken. The alien ernployment shall be limited to

technologies requiring highly specialized training and experience subject to the

required approval under existing laws, rules and regulations;



To



enjoy easement rights and use of timber, water and other nafural

resources in the Contract Area subject to pertinent laws, rules and

regulations and the rights of third parties;

Of repatriation of capital and remittance of profits, dividends and interest on

loans. subject to existing laws and Bangko Sentral rutres and regulations;

and



h)



To import when necessary all equipment, spare parts and raw materials

required in the operations in accordance with existing laws and regulations.



I



1.3



Obligation of the Govemment

The Government shall:



Ensure that the Contractor has the Government's full cooperation in thq

exercise of the rights granted to it under this Agreement;



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Use its best efforts to ensure the timely issuance of necessary permits and 11.similar authorizing documents for use of the surface of the Contract Area;



\:



and



cooperate with the Contractor in its efforts to obtain financing

contemplated herein from banks or other financial institutions: Provided,

That such financing ilrangements will in no event reduce the Contractor's

obligation on Government rights hereunder.



To



SECTION



XII



ASSETS AND EQUIPMENT



l2.I



The Contractor shall acquire for the Mining Operations only such assets that are

reasonably estimated to be required in carrying out such Mining Operations.



12.2 All materials, equipment, plant and other installations erected or placed on the

Contract Area of a movable nature by the Contractor shall remain the property of

the Contractor. The Contractor shall have the right to remove and re-export such

materials and equipment, plant and other installations from the Philippines, subject

to existing rules and regulations. In case of cessation of Mining Operations on

public lands occasioned by its voluntary abandonment or withdrawal, the

Contractor shall have a period of one (1) year from the time of cessation within

which to remove its improvements; otherwise, all social infrastructures and

facilities shall be turned over or donated tax

to the proper government



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authorities, national or local, to ensure that said infrastructures and facilities are

continuously maintained and utilized by the host and neighboring communities.



13.2



Cost and expenses of training such Filipino personnel and the Contractor's own

employees shall be included in the Operating Expenses.



13.3 The Contractor



shall not discriminate on the basis



of gender and shall respect,n. \

right of women workers to participate in policy and decision-making process€s

affecting their rights and



benefits.



SNCTION



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Xtv



ARBITRATION



l4.l



The Government and the Contractor shall consult with each other in goort faith

and shall exhaust all available remedies to settle any and all disputes or

disagreements arising out of or relating to the validity, interpretations,

enforceability, or performance of this Agreement before resorting to arbitration as

provided for in Section 14.2 below.



14.2



Anv disagreement or dispute which can not be settled amicably within a period of

one (i) year from the time the issue was raised by a Party shall be settled by a

tribunal of three (3) arbitrators. This tribunal shall be constituted as follows: one

to be appointed by the Contractor and another to be appointed by the Secretary.

The first two appointed arbitrators shall continue to consider names of qualified

persons until agreement on a mutually acceptable Chairman of the tribunal is

selected. Such arbitration shall be initiated and conducted pursuant to Republic

Act No. 876, otherwise known as the,,Arbitration Act,,.

In any event, the arbitration shall be conducted applying the substantive laws of the

Republic of the Philippines.



14.3



Each party shall pay fifty per centum (50%) of the fees and expenses of the

Arbitrators and the costs of arbitration. Each party shall pay its own costs and

attorney's fee.



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15,i



This Agreement may be suspended for failure of the Contractor: (a) to comply

with any provision or requirement of the Act and/or its implementing rules and

regulations; (b) to pay taxes, fees and/or other charges demandabie and due the

Government.



75.2



This Agreement terminates or may be terminated for the following causes: (a)

expiration of its term, whether original or renewal; (b) withdrawal from the

Agreement by the Contractor; (c) violation by the Contractor of the Agreement's

terms and conditions; (d) failure to pay taxes, fees/or charges or financial

obligations for two (2) consecutive years; (e) false statement or omission of facts

by the Contractor; and (f) any other cause or reason provided under the Act and

its implementing rules and regulations, or any other relevant laws and regulations.



15.3



A1l statements made in this Agreement shall be considered as conditions and

essential parts hereo{, and any falsehood in said statements or omission of facts

which may alter, change or affect substantially the fact set forth in said statements

shall be a ground for its revocation and termination.



L5.4



The Contractor may, by giving due notice at any time during the term of this

Agreement, apply for its cancellation due to causes which, in the opinion of the

Contractor, render continued mining operation no longer feasible or viable. ln

this case, the Secretary shall decide on the application within thirty (30) days from

notice: Provided, That the Contractor has met all the financial, fiscal and legal

obligations



15.5



No delay or ornissions or course of dealing by the Government shall impair any of

its rights under this Agreement, except in the case of a written waiver. The

Government's right to seek recourse and relief by all other means shall not be

construed as a waiver of any succeeding or other default unless the contrary

intention is reduced in writing and signed by the party authorized to exercise the

waiver.



15.6



In case oftermination, the Contractor shall pay all the fees and other liabilities due

up to the end of the year in which the termination becomes effective. The

Contractor shall immediately carry out the restoration of the Contract Area in

accordance with good mining industry practice.



15.7



The withdrawal by the Contractor from the Mineral Agreement shall not release it

from any and all financial, environmental, legal and fiscal obligations under this

Agreement;



8



The following acts or omission , inter qlia shall constitute breach of contract upon

which the Government may exercise its right to terminate the Agreement:



I5



'



a)



Failure of the Contractor without valid reason

Production within the period prescribed; and



b)



Failure of the Contractor to conduct mining operations and other activities in

accordance with the approved Work Programs andlor any modification

thereof as approved by the Director.



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to commence



Commercial



15.9 The Government may suspend and cancel tax incentives and credits if



the

Contractor fails to abide by the terms and conditions of said incentives and credits.



SECTION XVI



OTIIER PROVTSIONS



16.1 Any terms and conditions



resulting from repeal or amendment of any existing laws

or regulation or from the enactment of a law, regulation or administrative order

shall be considered apart of this Agreement



1,6.2 Notice

All notices, demands and other communications required or permitted hereunder

shall be made in writing, telex or telecopy and shall be deemed to have been duly

given notice, in the case of telex or telecopy, if answered back or confirmation

received, or if delivered by hand, upon receipt or ten days after being deposited in

the mail, airmail postage prepaid and addressed as follows:



If to the Government:



Tllg



SncnrTARY

Department of Environment and Natural Resources

DENR Building, Visayas Avenue

Dilimarq Quezon City



If to the Contractor



:



THT Pi TSIDENT

Central Palawan Mining & Industrial Corporation

5885 Zobel Roxas Street



Makati City

Either party may substitute or change such address on notice thereof to the other

party



16.3



Governing Law



This Agreement and the relation between the parties hereto shalt be governed by

and construed in accordance with the laws of the Republic of the Philippines. The

Contractor hereby agrees and obliges itself to comply with the provisions of the

Act, its implementing rules and regulations and other relevant laws and

regulations.



16.4



Suspension



a)



of



Obligation



Any failure or delay on the part of any party in the performance of its

obligation or duties hereunder shall be e>lcused to the extent attributable to

Force



Majeure.



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b) If



Mining Operations are delayed, curtailed or prevented by such Force

Metjeu'e causes, then the time for enjoying the rights and carrying out the

obligations thereby affected, the term of this Agreement and all rights and

obligations hereunder shall be extended for a period equal to the period

involved.



c)



16.5



The Party, whose ability to perform its obligations is affected by such Force

Majeure causes, shall promptly give Notice to the other in writing of any

such delay or failure of performance, the expected duration thereof and its

anticipated effect and shall use its efforts to remedy such delay, except th"at

neither Party shall be under any obligation to settle a labor dispute.



Amendments



This Agreement shall not be annulled, amended or modified in any respect except

by mutual consent in writing of the herein parties.



Secretary

ient of Environment and

atural Resources



(Signature over Printed Name)



Republic of the Philippines)



)ss

Before me, a Notary Public



for and in the City of euezon,



personally appeared



issued on

capacity as Secretary of the Department of Environment and Natural Resources, and

BENITO Q. BENGZON, with Community Tax Cerrificate No.

issued on

at

in his capacity as



day



of



Notary Public

Doc. No.

Page No.



Book No.

Series of 20