Common use of EXPLOITATION PHASE Clause in Contracts

EXPLOITATION PHASE. 7.1 Should the Participants pursuant to a Bankable Feasibility Study, decide to proceed to the Exploitation Phase of the Joint Venture Project, the Participants shall decide whether to form a new legal entity to conduct exploitation, and on failure to reach such an agreement, the Joint Venture will continue to operate in accordance with the terms and conditions set out hereunder. 7.2 During the Exploitation Phase all Capital Expenditure and Operating Expenditure requirements of the Joint Venture Project shall be funded by the Participants in accordance with their respective Participation Interests in the Joint Venture from time to time. 7.3 In regard to management of the cash of the Joint Venture during the Exploitation Phase: 7.3.1 all of the Proceeds and all the other revenue of the Joint Venture derived from the sale of anything else by or on behalf of the Participants as a result of the holding of their Participation Interests in the Joint Venture, or any insurance proceeds as a result of a claim for loss of Profits, will be paid into a bank account in the name of the Joint Venture; 7.3.2 Operating Expenditure and Capital Expenditure of the Joint Venture shall be paid for by the Manager out of the bank account referred to in 7.3.1; 7.3.3 the Manager shall retain sufficient funds in the said bank account to fund working capital of the Joint Venture required for Operating Expenditure and Capital Expenditure of the Joint Venture in an amount to be determined by the Manager, which amount may be varied by the Management Committee at any time; 7.3.4 the Participants will maintain the Profit distribution policy whereby, subject to the making of appropriate specific reservations, the portion of annual Profit to be distributed and the portion thereof to be retained, will be commensurate with the maintaining of a sound financial position of the Joint Venture. 7.4 It is recorded that all liabilities and obligations of the Joint Venture shall be borne by the Participants in accordance with their respective Participation Interests in the Joint Venture from time to time. 7.5 All Capital Expenditure and Operating Expenditure will only be incurred in terms of a Budget and/or the Manager's schedule of authority. The Management Committee shall be required to approve Budgets, cash flow forecasts and cash call procedures. 7.6 Should a community trust or similar such entity be established by the Participants in relation to the Joint Venture Project during the Exploitation Phase of the Joint Venture Project the Participation Interest of such a community trust shall be determined at the time of completion of the Bankable Feasibility Study, and shall be obtained proportionately from the Participation Interests of PTM and AW. 7.7 From the Effective Date, the Participation Interest of a Participant, shall be re-calculated at the end of each successive Call in accordance with the formula set out hereunder : A 100 X= ____ X ____ where X is the Participation Interest of the Participant concerned, expressed as a percentage, at the end of a particular Call; A is PTM's Deemed Expenditure (R350 000,00) and AW's Deemed Expenditure (R150 000,00) on the JV Area plus all Expenditure actually incurred by the Participant concerned since the Effective Date; B is the total Expenditure incurred on the JV Area since the Effective Date plus an amount which equals the aggregate of PTM's Deemed Expenditure and RM's Deemed Expenditure. 7.8 If a Participant defaults in meeting a Call within the periods specified in this Agreement, the defaulting Participant's Participation Interest will be recalculated in accordance with the formula in clause 7.8 applied at the end of each Call in question.

EXPLOITATION PHASE. 7.1 Should the Participants pursuant to a Bankable Feasibility Study, decide to proceed to the Exploitation Phase of the Joint Venture Project, the Participants shall decide whether to form a new legal entity to conduct exploitation, and on failure to reach such an agreement, the Joint Venture will continue to operate in accordance with the terms and conditions set out hereunder. 7.2 During the Exploitation Phase all Capital Expenditure and Operating Expenditure requirements of the Joint Venture Project shall be funded by the Participants in accordance with their respective Participation Interests in the Joint Venture from time to time. 7.3 In regard to management of the cash of the Joint Venture during the Exploitation Phase: 7.3.1 all of the Proceeds and all the other revenue of the Joint Venture derived from the sale of anything else by or on behalf of the Participants as a result of the holding of their Participation Interests in the Joint Venture, or any insurance proceeds as a result of a claim for loss of Profits, will be paid into a bank account in the name of the Joint Venture; 7.3.2 Operating Expenditure and Capital Expenditure of the Joint Venture shall be paid for by the Manager out of the bank account referred to in 7.3.1; 7.3.3 the Manager shall retain sufficient funds in the said bank account to fund working capital of the Joint Venture required for Operating Expenditure and Capital Expenditure of the Joint Venture in an amount to be determined by the Manager, which amount may be varied by the Management Committee at any time; 7.3.4 the Participants will maintain the Profit distribution policy whereby, subject to the making of appropriate specific reservations, the portion of annual Profit to be distributed and the portion thereof to be retained, will be commensurate with the maintaining of a sound financial position of the Joint Venture. 7.4 It is recorded that all liabilities and obligations of the Joint Venture shall be borne by the Participants in accordance with their respective Participation Interests in the Joint Venture from time to time. 7.5 All Capital Expenditure and Operating Expenditure will only be incurred in terms of a Budget and/or the Manager's ’s schedule of authority. The Management Committee shall be required to approve Budgets, cash flow forecasts and cash call procedures. 7.6 Should a community trust or similar such entity be established by the Participants in relation to the Joint Venture Project during the Exploitation Phase of the Joint Venture Project the Participation Interest of such a community trust shall be determined at the time of completion of the Bankable Feasibility Study, and shall be obtained proportionately from the Participation Interests of PTM and AWRM. 7.7 Upon the introduction of a black economic empowerment Participant in accordance with 3.2, the Participation Interest of such black economic empowerment Participant shall be deducted from the Participation Interests of PTM and RM proportionately. 7.8 From the Effective Date, the Participation Interest of a Participant, shall be re-calculated at the end of each successive Call in accordance with the formula set out hereunder : A 100 X= ____ X ____ where X is the Participation Interest of the Participant concerned, expressed as a percentage, at the end of a particular Call; A is PTM's ’s Deemed Expenditure (R350 000,00in the case of PTM) and AW's RM’s Deemed Expenditure (R150 000,00in the case of RM) on the JV Area plus all Expenditure actually incurred by the Participant concerned since the Effective Date; B is the total Expenditure incurred on the JV Area since the Effective Date plus an amount which equals the aggregate of PTM's ’s Deemed Expenditure and RM's ’s Deemed Expenditure. 7.8 7.9 If a Participant defaults in meeting a Call within the periods specified in this Agreement, the defaulting Participant's ’s Participation Interest will be recalculated in accordance with the formula in clause 7.8 applied at the end of each Call in question. 7.10 If either Participant’s Participation Interest is diluted to 10% (TEN PERCENT) it shall be deemed to have acquired a net smelter royalty on the basis as determined in Appendix “1”, and its Participation Interest shall thereafter lapse.