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WHEREAS, the Contractor desires to join and assist the Governmenl in the

initial rational exploration and possible development and utilization for

commercial purposes of limestone and other associated mineral deposits

existing in the Contract Area (as herein defined),

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

competence, technology and environmental management skills required to

promptly and effectively carry out the 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:




This Agreement is a Mineral Production Sharing Agreement entered into

pursuant to the provisions of the Act and its implementing rules and

regulations. The primary purpose of this Agreement is to provide for the

rational exploration, development and commercial utilization of limestone

and other associated mineral deposits existing within the Contract Area,

with all 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 ContracuMining Area without pre.iudice to the acquisition

by the Contractor of the land/surface rights through any mode of

acquisition provided for by law.

The Contractor shall undertake and execute. for and on behalf of the

Government, responsible mining operations in accordance with the

provisions of this Agreemenl, 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



minerals in commercial quantity are developed and produced, it will not be

entitled to reimbursement.

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

of minerals derived from the mining operations contemplated herein shall

be accounted for and divided between the Government and the

Contractor in accordance with Section VIII hereof.

2.1. +! refers to Republic

Mining Act of 1995.'

Act No. 7942, otheMise known as lhe.phitippine

2.2. Aoreement means this Mineral production Sharing Agreement.

2.3. Asgociated Minerals mean other ores/minerals, which occur together

with the principal ore/mineral.




Budqet means an estimate of expenditures to be made by Contractor in

mining operations contemplated hereunder to accomplish the Work


means Bangko Senhal ng pilipinas.

Program for each particular period.

2.6. Bureau

means Mines and Geosciences Bureau.


Calendar Year or Year means a period of twelve (12) consecutive

months starting with the first day of January and ending on December 31,

while "Calendar Quarter" means a period of three consecutive months

with the first calendar quarter starting with the first day of January.


Commercial Production means the production of sufficient quantity of

minerais to sustain economic viability of mining operations reckoned from

the date of commercial operation as declared by the Contraclor or as

stated in the feasibility study, whichever comes first.


Constitution or Philippine Constitution means the 1987 Constitution of

the Republic of the Philippines adopted by the Constitutional Convention

of 1986 on Octobe|15, 1986 and ratified by the People of the Republic of

the Philippines on February 2, '1987.

2.10. Contract Area means the area onshore or offshore delineated under the

Mineral Production Sharing Agreement subject to the relinquishment

obligations of the Contractor and properly defined by latitude and

longitude or bearing and distance.


means a period of twelve (12) consecutive months

counted from the Effective Date of this Agreement or from the anniversary

of such Effective Date.

2.11. Contract

2.12. Contractor means Apo Land and Quarry Corporation or its assignee(s)

of interest under this Agreement: Provided, That the assignment of any of

such interest is accomplished pursuant to the pertinenl provisions of the

implementing rules and regulations of the Act.

2.13. Declaration of Minino Proiect Feasibilitv means a document proclaiming

the presence of minerals in a speciflc site, which are recoverable by

socially acceptable, environmentally safe and economically sound

methods specified in the Project Feasibility Study.

2.14. Department or


Natural Resources.

2.15. Director means the


means the Department


Environment and

Date means the date of execution of this Agreement by the

Contractor and by the Secretary on behalf of the Govern;ent.

2.16. Effective

2.17. Environment means all facets of man,s surroundings: physical, ecological,

aesthetic, cultural, economic, historic, institutional and social.

2.18. Exploretiqn means searching or prospecting for mineral resources


geological, geophysical and geochemical surveys, remote sensing, test

pitting, trenching, drilling, shaft sinking, tunneting or any other mejns for

the purpose of determining the existence, extent, quality and quantity of

mineral resources and the feasibility of mining them for profit.

2.19. Exoloration Period shall mean the 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 for nonmetallic minerals and

eight (8) years for metallic minerals, subject to the pertinent provisions of

the implementing rules and regulations of the Act.

2.20. Force Maieure 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 thereof, act of God or any public enemy and

any cause as herein described over which the affected party has no

reasonable control.

2.2'1. Foreiqn Exchanoe means any cunency other than lhe currency of the

Republic of the Philippines acceptable to the Govemment and the


2.22. Government means the Government of the Republic of the Philippines

or any of its agencies and instrumentalities.

2.23. Gross Outout 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.l.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 market value shall be the world

price quotation of the refined mineral products contained thereof

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

refinjng, treatment, insurance, transportation and other charges incurred

in the process of converting mineral concentrates into relined metal

traded in those commodity




2.24. Mine Development refers to work undertaken to prepare an orebody or


deposit for mining, including the construction of necessary



infrastructure and related lbcilities.








lt]ilillilillfl fiil fl tilililn fl llitfl lltiltil





mean all naturally occurring inorganic substances in solid,

liquid, gas or any intermediate state excluding energy materials such as

coal, petroleum, natural gas, radioactive materiils and geothermal


2.26. Mineral Products mean materials derived from mineral ores/rocks and

prepared into marketable state by metallurgical processes which include

beneficiation, cyanidation, leaching, smelting, calcination and other similar


Area means that po(ion of the Contract Area identified by the

Contractor as defined and delineated in a Survey plan duly approved by

the Director/Regional Director concerned for purposes of development

and/or utilization and sites for support facilities.

2.27. Minino

2.28. Mininq Operations means mining activities involving exploration,

feasibility study, environmental impact assessment, development,

utilization, mineral processing and mine rehabilitation.

2.29. !9!!99 means notice in writing, telex or telecopy (authenticated by answer

back or confirmation received) addressed or sent as provided in Section

16.2 of this Agreement.

2.30. QIq means naturally occurring substance or material from which a mineral

or element can be mined and/or processed for profit.

2.31. Pollution means any alteration of the physical, chemical and/or 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 objectionable odor,

as will or is likely to 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 domestic, commercial,

industrial, agricultural, recreational or other legitimate purposes.

2.32. Secretarv means the Secretary of the Department of Environment and

Natural Resources.



means the Republic ofthe Philippines.

2.34. Work Prooram 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.

years from Effective

term not exc€eding




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. ln the event the Governmenl decides to allow

mining ope€tions 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 of the highest bidder.


Parcel B



Parcel C



Parcel D



Parcel E







- The Contractor shall commence Exploration

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

period of two (2) years, renewable for like periods but not to exceed a

Timetable for Exploration

total term of six (6) years for nonmetallic minerals and eight (8) years for

metallic minerals, subject to annual review and approval by the Director in

accordance with the implementing rules and regulations of the Act.

Renewal of Exploration Period - ln case the Contraclor opts for a renewal

of its Exploration Period, it shall lile prior to the expiration thereof, a

renewal application in the Mines and Geosciences Bureau Central Office,

accompanied by the mandatory requiremenls stipulated


implementing rules and regulations of the Act. The Director may grant the

renewal of the Exploration Period on condition that the Contractor has

substantially complied with the terms and conditions of the Agreement.

Provided, That with or without the filing of the renewal application, the

Exploration Period shall, upon its expiration, automatically shift to the next

two (2) - year term, and so on.


ln cases where further exploration is warranted beyond the six (6) - year

or eight (8)-year period and on condition that the Contractor has

substantially implemented the Exploration and Environmental Work

Programs as verified by the Bureau, the Director may further grant

renewal of the Exploration Period: Provided, That the Contractor shall be

required to set up a performance surety equivalent to the expenditure

requirement of lhe Exploration and Environmental Work Programs.

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 of not liss than that specified for each of the y-'


Contract Years,


For the Exploration Work Program:

1st Contract Year

2nd Contract Year


For the Environmentai Work






PhP 581,000.00

PhP 3,270,000.00

PhP 3,851,000.00



ln the event of renewal of the Exploration period, the amount to be spent

every year shall first be agreed upon by the parties.

ln 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. lf during any Contract Year, the Contractor

should expend more lhan 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 a year, then the deficiency shall be

applied to the amount to be expended during the succeeding Contract


Relinquishment of Total/Portion 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 by the Director, the

Contraclor shall finally relinquish any portion of the Contract Area not

necessary for mining operations and not covered by any Declaration of

Mining POect Feasibility.

Final Mining Area - The Director may allow the Contractor lo hold more

than one (1) linal 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


Declaration of Mining Project Feasibility - Within the term of the

Exploration Period, the Contractor shall file in the Regional Office

concerned, the Oeclaration of Mining Project Feasibility of the Contract

Area/final Mining Area supported by Project Feasibility Study, Three (3)Year Development and Construction or Commercial Operation Work

Program, complete geologic report, an application for survey and the

pertinent Environmental Compliance Certiflcate, among other applicable

requirements. Failure of the Contractor to submit the Declaration of

Mining Project Feasibility during the Exploration period shall be

considered a substantial breach of this Agreement.

Order of Survey complete with the mandatory requirements stated in the

implementing rules and regulations of the Act.




During the Exploration Period, the Contractor shall submit to the

Director, through the Regional Director concerned, quarterly and

annual accomplishment reports under oath on all activities

conducted in the Contract Area from the Effective Date of this

Agreement. The quarterly report shall be submitted not later than

fifteen (15) days at the end of each Calendar euarter 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 samples, field data, copies of

originals from 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 confidentiality clause of this Agreement.


Final Report - The Conlractor shall submit to the Director, through

the Regional Director concerned, a final report under oath upon

the expiration of the Exploration Period which shall be in the form

and substance comparable to published professional reports of

respectable international institutions and shall incorporate all the

findings in the Contract Area including location of samples, assays,

chemical analysis, and assessment of 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 include detailed

expenditures incurred during the Exploration Period. ln case of

diamond drilling, the Contractor shall, upon request of the

Director/Regional Director concerned, submit to the Regional

Offlce concerned a quarter of the core samples, which shali be

deposited in the Regional Office Core Library for safekeeping and



Relinquishment Report - The Contractor shall submit a separate

relinquishment report with a detailed geologic repo( of the

relinquished area accompanied by maps at a scale of 1:50,000 and

results of analyses and detailed expenditures, among others.




Timetable - The Contractor shall complete the development of the mine

including the construction of production facilities within thirty-six (36)

months from the submission and approval of the Declaration of Mining

Project Feasibility, subjqct to such extension based on justifiable reasons








as the Director may approve, upon recommendation of the Regional

Director concerned.




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

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

Oirector concerned, 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.


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

development and construction activities, the Contractor shall

submit a final report to the Director, through the Regional Director

concerned. 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.




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

completion of mine development and construction of production facilities,

to the Oirector, through the Regional Director concerned, a Three-Year

Commercial Operation Work Program. The Contractor shall commence

commercial utilization immediately upon approval of the aforesaid Work

Program. Failure of the Contractor to commence Commercial Production

within the period shall be considered a substantial breach of the



Commercial Operation Work Program and Budget - During the Operating

Period, the Contractor shall submit to the Director, through the Regional

Director concerned, 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


The Contractor shall conduct Mining Operations and other activities for

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

Work Programs and corresponding Budgets.


Expansion and Modification of Facilities - The Contractor may make

expansions, modifications, improvements, and replacements of the

mining facilities and may add new facilities as the Contractor may

consider necessary for the operations: Provided, That such plans shall be

embodied in an appropriate Work Program approved by the Director.






with the tirst Calendar Quarler

of the Operating Period, the

Contractor sha submit, within thirty (30) days after the end of each

Calendar Quarter, to the Director, through the Regional Director

concerned, 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 oi Jxports and

to whom sold; terms of sales and expenditures.


Annual Reports - During the Operating period, the Contractor shall

submit within sixty (60) days from the end of each Calendar year,

to the Director, through the Regional Director concerned, 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 belween tonnage mined, tonnages transported

from the minesite and their corresponding destination,

tonnages stockpiled in the mine and elsewhere in the

Philippines, tonnages sold or committed for export (whether

actually shipped from the Philippines or not), tonnages

actually shipped from the Phitippines (with fu detaits as to

purchaser, destination and terms of sale), and if known to

Contractor, tonnages reflned, processed or

manufactured in the Philippines with full specifications as to

the intermediate products, by-products or final products and

of the terms at which they were disposed;



Work accomplished and work in progress at the end of the

year in question with respect to all the installations and

facilities related to the utilization program, including the

investment actually made or committed; and


Profile of work force, including management and staff,

stating particularly their nationalities, and for Filipinos, their

place of origin (i.e., barangay, town, province, region).

The Contractor shall also comply with other reporting requirements

provided for in the implementing rules and regulations of the Act.

sEcTtoN v



General Principle - The fiscal regime of this Agreement shall be governed

by the principle according to which the Government expects a reisonable

return in economic value for the utilization of non-renewable mineral

resources under its national sovereignty while the Contractor expects a

reasonable return on its investment with special account to be taken for

the high risk of exploration, the terms and conditions prevailing elsewhere

in the industry and any special efficiency to be gained by J particularly

good performance of the Contractor.

(15) days upon receipt of the notice of

the Regional Offlce concerned, the

Contractor shall cause the registration of this Agreement with the said

Regional Office and pay the registration fee at the rate provided in the

existing rules and regulations. Failure of the Contractor to cause the

registration of this Agreement within the prescribed period shall be

sufficient ground for cancellation of the same.

Occupation Fees - Prior lo registration of this Agreement and at the same

date every year thereafter, the Contractor shali pay to the Municipaucity

Treasurer concerned an occupation fee over the Contract Area at the

annual rate provided in the existing rules and regulations. lf the fee is

not paid on the date specified, the Contractor shall pay a surcharge of

twenty five percenl (25o/o) of the amount due in addition io the occup;tion


Share of the Government - The Government Share shall be the excise

tax on mineral products at the time of removal and at the rate provided for

in Republic Act No. 7729 amending Section 15l (a) of the National

lnternal Revenue Code, as amended, as well as other taxes, duties and

fees levied by existing laws. The Excise Tax shall be timely and

completely paid to the nearest Bureau of lnternal Revenue Offlce in the

province concerned. For purposes of determining the amount of the

herein Government Share, the Contractor shall stricfly comply with the

auditing and accounting requirements prescribed under existing laws and


The Government Share shall be allocated in accordance with Sections

290 and 292 of Republic Act No. 7160, otheMise known as ,,The Locat

Government Code of 1991 ."

Pricing of Sales - The Contractor shall dispose of the minerals and byproducts produced at the highest market price prevailing in the locality.

The Contractor shall also pay the lowest achievable marketing

commissions and related fees and shall negotiate for more advantageous

terms and conditions subject to the right to enter into long-term sales or

marketing contracts or foreign exchange and commodity hedging

contracts, which the Government acknowledges to be acceptable

notwithstanding that the sale price of the minerals and by-products may

from time to time be lower, or the terms and conditions of sales are less

favorable, than that available elsewhere. The Contractor shall seek to

strike a balance between long-term sales or marketing contracts or foreign

exchange and commodity hedging contracts comparable to policies

followed by independent producers in the international mining industry.

a balanced distribution among

consumers. lnsofar as sales to Contractor's affiliate(s) are concerned,

prices shall be at arm's length standard, and competing offers for large

The Contractor shall likewise seek

scale and long-term contracts shall be procured. Before any sale and/or

shipment of mineral product is made, existing and future marketing

contract(s)/sales agreement(s) shall be submitted to the Director, copy

furnished the Regional Director concemed, for registration. At the same

time, the Contractor shall regularly inform the Director in writing of any

revisions, changes or additions in said contract(s)/agreement(s).

The Contractor shall reflect in its Monthly/euarterly Report on production,

Sales and lnventory of Minerals, as well as in the lntegrated Annual


corresponding registration number(s) of t-he marketing


contract(s)/agreement(s) governing lhe export or sale of minerals.


Associated Minerals - lf minerals other than limestone and other

associated mineral 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.

sEcTtoN tx



Submission to Government - Within the periods stated herein, the

Conkactor shall prepare and submit to the Director, through the Regional

Director concerned, a Work program and corresponding Budget for the

Contract Area stating the Mining Operations and expenditureJwhich 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



Government's Examination and Revision of Work program - Should the

Government decide to propose a revision to a certain speciric feature in

the Work Program or Budget, it shall, within thirty (30) days after receipt

thereof, provide a Notice to the Contractor specifying in reasonable detail

its reasons therefore. Prompfly thereafter, the Government and

Contractor will meet and endeavor to agree on the revision proposed by

the Government. ln 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. lf the Government should fail within sixty (60)

days from receipt thereof to notify Contractor of the proposed revisions,

the Work Program and Budget proposed by the Contractor shall be

deemed to be approved.


Contractor's Changes

to Work


- lt 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 negative variance of at least twenty percent (20olo) shall be

subject to the approval of the Director.

ln case of any positive variance, the Contractor shall submit to

Director, through the Regional Director concerned, a copy each of

Work Programs, for information.


The Government's approval of a proposed Work Program and Budget

not be unreasonably


will /'y.u(

sEcTtoN x


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

financially, socially, culturally and environmenially responsible manner to

achieve the sustainable development objectivej and responsibilities as

provided for under the implementing rules and regulations of the Act.

10.2. The Contractor shall ensure that the standards

of environmentat

protection are met in the course of the Mining Operations. 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 minrng.

10.3. The Contraclor shall submit an Environmental Work program during the

Exploration Period as prescribed in the implementing rules and

regulations of lhe Act.

10.4. An Environmental Compliance Certilicate (ECC) shall be secured first by

the Contractor prior to the conduct of any development works,

construction of production facilities and/or mine production activities in the

Contract Area.

10.5. 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 affected 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

environmental/geological condition, nature and scale of operations and

technology to be employed in the Contract Area.

10.6. The Contractor shall submit, within thirty (30) days prior to the beginning

of every calendar year, an Annual Environmental Protection and

Enhancemenl Program (AEPEP), using MGB Form l6-3, 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 flve percent (3%-5%) of its

direct mining and milling costs depending on the environmental/geologic

condition, nature and scale of operations and technology employed in the

Contract Area.

10.7. The Contractor shall establish a Contingent Liability and Rehabilitation

Fund (CLRF) which shall be in the form of the Mine Rehabilitation Fund

(MRF) and the Mine Waste and Tailings Fee (MWTF).

The MRF shall be based on the financial requirements of the approved

EPEP as a reasonable environmental deposit to ensure satisfactory

compliance with the commitments/strategies of the EPEP/AEPEP and

availability of funds for the performance of the EPEP/AEPEP during the

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

government depository Qank and shall be used for physical and social


T 15




illlll[[lllf, lillfl ffi




rehabilitation of areas affected by mining activities and for research

on the

social, technical and preventive aspects of rehabilitation.

The MWTF shall be collected based on the amounts of mine waste and

mil t{lings generated during the conduct of Mining Operalions. fire

MWTF collected shall accrue to a Mine Waste and fa"ilings ieslrve fund

and shall be deposited in a government depository Oani fo,

fayment ot

compensation for damages caused by the Mining Operations.

'10.8. The Contractor shall set up mitigating

measures such as mjne waste and

mill tailings disposal system, mine iehabilitation or plan, water quatity

monitoring, etc. to minimize land degradation, air and watei pollution,


rock drainage and changes in hydrogeology.

10.9. The Contractor shall set up an Environmental and Safetv Office at its

minesite manned by qualified personnel to plan, implement and monitor

its approved EPEP.

10.10. Th.e.Contractor shall be responsible in the monitoring of environmental,

safety and heatth conditions in the Contract Area and;hall stricfly comply

with all the rules and regulations embodied under DAO No.

otheMise known as the "Mine Safety and Health Standards.',



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 of the Act.

sEcTtoN xt





Obligations of the Contractor:


To exclusively conduct sustainable Mining Operations within the

Contract Area in accordance with the provisions of the Act and its

implementing rules and regulations;





To 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 or desirable for the purpose of

Mining Operations;


To keep accurate technical records about the Mining Operations,

as well as financial and marketing accounts, and make them

available to Goverfrment representati-ves authorized by the Director






for the purpose of assessing the performance and compliance of

the Contractor with the terms of this Agreement. Authorized

representatives of other Government Agencies may also have

access to such accounls in accordance with existing laws, rules

and regulations;

To furnish the Bureau all the data and information gathered from

the Contract Area and that all the books of accounti and records

shall be open for inspection;

To allow access to Government during reasonable hours


inspecting the Contract Area and examining pertinent records for

purposes of monitoring compliance with the terms of this


To hold the Government free and harmless from all claims and

accounts of all kinds, as well as demands and actions arising out of

the accidents_or injuJies to persons or properties caused Oy trllning

Operations of the Contractor and indemnify the Government fo-r

any expenses or costs incurred by the Governmenl by reason of

any such claims, accounts, demands or actions;

ln the development of the community:



To recognize 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

(1%) of the value of the gross output of minerals sold;

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

medical services. Where traditional self-sustaining income

and the community activities are identified to be present, the

Contractor shall assist in the preservation and/or

enhancement of such activities;


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

direct mining and milling cosls 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;


To give preference to Filipino citizens who have established

domicile in the neighboring communities, in the hiring of

personnel for its mining operations. lf necessary skills and

expertise are currently not available, the Contractor must

immediately prepare

and undertake a training and

ln 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 internationally

accepted slandards and practices. Such maps shall be

made available to the scientific community in the most

convenient and cost effective forms, subject to the condition

that the Contractor may delay release of said information for

a reasonable period of time which shall not exceed three (3)



systematically keep the data generaled from the

Contracv Mining Area such as cores, assays and other

related information, including economic and financial data

and make them accessible to students, researchers and

other persons responsible for developing mining,

geoscience and processing technology subject to the

condition that the Contractor may delay release of data to

the science and technology community within a reasonable

period of time which shall not exceed three (3) years;

To transfer to the Government or local mining company the

appropriate technology it may adapt in the exploration,

development and commercial utilization of the minerals in

the Contract Area,

To allocate research and development budget for the

advancement of mining technology and geosciences in


with the Bureau, research institutions,

academe, etc.; and

To replicate data, maps and reports cited in ltems k.1 and

k.2 and furnish the Bureau for archiving and systematic

safekeeping which shall be made available to the science

and technology community for conducting research and

undertaking other aclivities which contribute to the

development of mining, geoscience and processing

technology and the corresponding national pool of

manpower talents: Provided, however, that the release of

data, maps and the like shall be similarly constrained in

accordance with ltems k.'l and k.2 above;

in the

Project Feasibility Study the planned

expenditures necessary to implement all the plans and programs



set forth in this Agreement; and

To pay all other taxes and fees mandated by existing laws, rules

and regulations.

11.2. Rights of the Contractor:



conduct Mining Operations within

the confines of


ContracuMining Area in accordance with the terms and conditions

hereof and without interfering with the riqhts


Contractors/Lessees/Operators/ permittees/permit Holders;



Possession of the Contract Area, with full right of ingress and

egress and the right to occupy the same, subject to surface and

easement rights;


To use and have access to all declassilied geological, geophysical,

drilling, production and other data relevant to the mining



To sell, assign, transfer, convey or otheMise dispose of all its

rights, interests and obligations under the Agreement subject to

the approval of the Government;


To employ or bring into the philippines foreign technical


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 foreign persons with the

Contractor ceases, the applicable laws and regulations on

immigration shall apply to them. Every time foreign technologies

are utilized and where alien executives are employed, an effective

program of training understudies shall be undertaken. The alien

employment shall be limited to technologies requiring highly

specialized training and experjence subject to the required

approval under existing laws, rules and regulations;


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

natural resources in the Contract Area subject to pertinenl laws,

rules and regulations and the rights of third parties;


Repatriation of capital and remittance of profits, dividends and

interest on loans, subject to existing laws and Bangko Sentral ng

Pilipinas rules and regulations; and


To import when necessary all equipment, spare parts and raw

materials required in the operations in accordance with existing

laws and regulations.


1.3. Obligations of the Government:


To ensure that the

Contractor has the Government's full

cooperation in the exercise of the rights granted to it under this



To use its best efforts to ensure the timely issuance of necessary

permits and similar authorizing documents for use of the surface of

the Contract Arqai and






a?L ^,,.*';,:r:*:;.





To cooperate with the Contractor in its efforts to obtain financing

contemplated herein from banks or other financial institutions;

Provided, That such financing arrangements will in no event reduce

the Contractor's obligation on Government rights hereunder.




12.1. fhe Contractor shall acquire for the Mining Operations only such assets

that are reasonably estimated to be required in carrying out such Mining


'12.2. All materials, equipment, plant and other installations of a movable nature

erected or placed on the Contract Area by lhe 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. ln 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; otheMise, all social infrastructures and facilities shall be

turned over or donated tax free to the proper government authorities,

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

continuously maintained and utilized by the host and neighboring






13.1. The Contractor agrees to employ, to the extent possible, qualified Filipino

personnel in all types of mining operations for which they are qualiried;

and after Commercial Production commences shall, in consultation and

with consent of the Government, prepare and undertake an extensive

training programme suitable to Filipino nationals in all levels of

employment. The objective of said programme is to reach within the

timetable set forth below the following targets

of 'Filipinization:'

Unskilled Skilled Clerical Professional Management












("/"\ ("/"\ e/0

100 100 100






13.2. Cost and expenses


























training such Filipino personnet and

the ]/

Contractor's own employees shall be included in the Operating Expenses.











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13.3. The Contractor shall not discriminate on the basis of gender and shall

respecl lhe right of women workers to pa(icipate in policy and decision_

making processes affecting their rights and benelits.

sEcTtoN xtv


14.1. The Government and the Contractor shall consult with each other in good

faith and shall exhaust all available remedies to setfle any and alldisputes

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

enforceability, or performance of this Agreement before resorting to

arbitration as provided for in Section 14.2. below.

14.2. Any disagreement or dispute which can not be setfled amicably within


period of one (1) year from the time the issue is raised by a party shall be

settled by a tribunal of three (3) arbilrators. This tribunal shall be

constituted as follows: one to be appointed by the Contractor and the

other to be appointed by the Secretary. The flrst two appointed arbitrators

shall 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, otheMise

known as the "Arbitration Act." ln any event, the arbitration shall be

conducted applying the substantive laws of the Republic of the


14.3. Each party shall pay flfty percent (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.




15.1. 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 on time the complete taxes,

fees and/or other charges demandable and due the Government.

15.2. 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 yearsi (e) false

statement or omission of facts by the Contractor; and (0 any other cause

or reason provided under the Act and its implementing rules and

regulations, or any other relevant laws and regulations.

15.3. All statements made in this Agreement shall be considered as conditions

and essential parts hereof, and any falsehood in said statements or

omission of facts wttch may alter, change or affect substantially the fact









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set forth in said statements shall be a ground for its revocation and


15.4. The Contractor may, by giving due nolice at any time during the term of

this Agreement, apply for its cancellation due to causes which, in tne

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, flscal and legal obligations.

15.5. No delay or omissions or course of dealing by the Government shall

impair any of its rights under this Agreemenl, except in the case of a

writlen 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 lo exercise the waiver.

15.6. ln case of termination, 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

Conlract 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.

15.8. The following acts or omission, inter alia shall constitute breach of

conlract, upon which the Government may exercise its right to terminate

the Agreement:



Failure of the Contractor without valid reason



Commercial Production within the period prescribed; and/or

Failure of the Contractor to conduct mining operations and other

activities in accordance with the approved Work Programs and/or

any modification thereof as approved by the Director.

15.9. The Government may suspend and canceltax incentives and credits if the

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

and credits.

16.2. Notice

All notices, demands and other communications required or


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, aiimail postage

prepaid and addressed as follows:

lf to the Government:


Department of Environment and Natural Resources

DENR Building, Visayas Avenue

Diliman, Quezon City

lf to the Contractor:


Ap-o Land and Quarry Corporation

25'" Floor Petron Mega Plaza

358 Sen. Gil J. Puyat Avenue, Makati City

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

the other party: Provided, That the Contractor shall, in case of any change

of address during the term of this Agreement, notify the Director in writing.

Failure to do such notification shall be deemed as waiver by the

Contractor to be informed about any communications as provided in

Section 16.2 above.

16.3. Governing Law

This Agreement and the relation between the parties hereto shall 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 of Obligation


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

its obligation or duties hereunder shall be excused to the extent

attributable to Forca Majeure as defined in the Act: Provided, That

the suspension of Mining Operations due lo Force Majeure causes

shall be subject to approval by the Director.



Mining Operations are delayed, curtailed or prevented by such

Force Majeure 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


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

such Folce Ma./.eure causes, shall promptly give Notice to the oiher

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 that neither Party shall be under any

obligation to settle a labor dispute: Provided, That the suspension

of obligation by the Contractor shall be subject to prior approval by

the Director.

16.5. Amendments

This Agreement shall not be annulled, amended or modilied in any

respect except by mutual consent jn writing of the herein parties.

lN WTNESS WHEREOF, the Parties hereto have executed this Agreement, as

of the day and year first above written


(Sgnature over Printed Name)

ironmeni and Naiural Resources


Republic of the Philippines)




Before me, a Notary Public for and in the City of Quezon, personally appeared

HORACIO C. RAMOS, with Community Tax Certificate No. 1822.t963

issued on Januarv 06. 20'10 at Quezon Citv, in his capacity as Secrctary of the

Department of Environment and Natural Resources, and PAUL VINCENT

ARCENAS, with Community Tax Certificate No. z4_ftt

issued on

Fitcrt T/ C


in nE-Effiiity as eresident of

Apo Land and Quarry Corporation, both known to me and to me known to be the

same persons who executed the foregoing instrument consisting of twenty five

(25) pages, including this acknowledgment page, and acknowtedged to me that

the same is their voluntary acts and deeds.


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