EXHIBIT 10.27
PRESTEA GOLD RESOURCES
MINING LEASE
MINING LEASE
is made the 29TH day of JUNE 2001 between THE GOVERNMENT OF THE REPUBLIC OF
GHANA (hereinafter called "the Government") acting by ▇▇. ▇▇▇▇▇ ▇▇▇▇▇▇▇, the
Minister of Lands, Forestry and Mines (hereinafter called "the Minister") of the
one part and PRESTEA GOLD RESOURCES LIMITED having its registered office as ▇.▇.
▇▇▇ ▇▇▇, ▇▇▇▇▇, ▇▇▇▇▇ (hereinafter called "the Company") of the second part:
WHEREAS:
The Government is desirous of developing its mineral resources in such manner as
will ensure that the maximum possible benefits accrue to the nation from the
exploitation of minerals and has agreed to grant the Company a Mining Lease on
the terms and conditions hereinafter following:
NOW THIS AGREEMENT WITNESSETH that:
1. GRANT OF MINING RIGHTS:
(a) The Government hereby grants to the Company mining rights to ALL
that piece of underground described in the schedule herein and more
particularly delineated on the Plan attached with the extent shown
in blue brackets (hereinafter called "the Lease Area") together with
mines, beds, seams veins, channels and strata of gold and associated
mineral substances lying below a depth of 200 metres measured from
the CENTRAL SHAFT PILLAR 1 with ordinates: X - 84378.45, Y -
148029.06, Z - 49.63, which horizon corresponds with a depth of
150.37 metres below the sea level, to a term of thirty (30) years
from the date of this Agreement. The strike of the underground lease
extends from the Ankobra shaft to the north to the Tuappim shaft in
the south (as indicated by the blue brackets on
the plan). Such term shall be renewable from time to time in
accordance with the Minerals and Mining Law, 1986 PNDC 153;
(b) The Government hereby grants to the Company the exclusive rights to
work, develop and produce gold and associated mineral substances in
the Lease Area for the said term of thirty (30) years (including,
the processing, storing and transportation of ore and materials
together with the rights and powers reasonably incidental thereto)
subject to the provisions of this Agreement;
(c) The Company shall commence commercial production of gold within two
(2) years from the date of this Mining Lease,
(d) The Company shall conduct its operations in a manner consistent with
good commercial mining practices, safety and security.
(e) Nothing contained in this Agreement shall be deemed to confer any
rights on the Company conflicting with provisions contained in the
Minerals and Mining Law, 1986, P.N.D.C.L. 153 or to permit the
Company to dispense with the necessity of applying for and obtaining
any permit or authorization which the Company may be required by law
or regulation to obtain in respect of any work or activity proposed
to be carried out hereunder.
2. GRANT OR RIGHTS TO THIRD PARTIES IN THE MINING AREA:
(a) Subject to satisfactory arrangements between the Government and the
Company, the Government shall grant the first option to the Company
to work minerals other than gold discovered in the Lease Area.
(b) Falling such satisfactory arrangements between the Government and
the Company, the Government reserves the right to grant licences to
third parties to prospect for or to enter into agreements for the
production of minerals other than
-2-
gold in the Lease Area, provided that any such activity shall not
unreasonably interfere with the rights granted to the Company
hereunder.
3. POWER OF GOVERNMENT 0 EXCLUDE PARTS OF THE MINING AREA:
(a) The Government may by reasonable notice in writing to the Company
exclude from the Lease Area, at any time and from time to time, any
part which may be required for any stated public purpose whatsoever,
provided that:
(i) The parts so excluded shall not have a surface area in the
aggregate greater than ten percent of the Lease Area.
(ii) Any parts of the Lease Area so excluded shall continue to form
part of the Lease Area subject to this Agreement except that
no mining operations shall be conducted on the parts so
excluded.
(iii) No part of the Lease Area shall be so excluded in respect of
which the Company shall have given prior notice specifying
that such part is required for mining operations hereunder or
on which active operations have commenced or are in progress
(such as digging, construction, installation or other works
related to gold mining) but, in lieu thereof, a part equal in
area to any such part shall be excluded for such public
purposes; and
(iv) The Government shall not take to itself or grant to third
parties the right to mine gold from any part so excluded.
(b) The company shall be relieved of all liabilities or obligations
hereunder in respect of any part excluded under this paragraph
except liabilities or obligations accrued prior to such exclusion.
-3-
4. WORK OBLIGATION:
The Company shall continuously operate In the Lease Area in accordance
with good mining practices until such time as the reserves or deposits may
be exhausted or the mine can no longer be economically worked or until
this Agreement expires, whichever shall be sooner.
5. CONDUCT OF OPERATIONS:
(a) The Company shall conduct all of its operations hereunder with due
diligence, efficiency, safety and economy, in accordance with good
mining practices and in a proper and workmanlike manner, observing
sound technical and engineering principles using appropriate modern
and effective equipment, machinery, materials and methods, and pay
particular regard to conservation of resources, reclamation of land
and environmental protection generally.
(b) The Company shall mine and extract ore in accordance with paragraph
5(a) herein utilizing methods which include stoping and shaft
sinking in the Lease Area.
(c) The company shall maintain all equipment in good and safe condition,
normal wear and tear excluded, and shall keep all excavated areas
and shafts, in good and safe condition.
(d) The Company shall fence off effectually from the adjoining lands,
all pits, shafts and other works made or used under the powers
hereof.
(e) The Company shall provide and maintain proper and sufficient drains,
culverts, arches and passageways for carrying off any waters which
shall arise or be produced or interrupted by any of the works hereby
authorized so that the drainage of the Lease Area may not be
prevented or prejudiced.
-4-
6. NOTIFICATION OF DISCOVERY OF OTHER MINERALS:
(a) The Company shall report forthwith to the Minister, the Chief
Executive of the Minerals Commission, the Chief Inspector of Mines
and the Director of Geological Survey, the discovery in the Lease
Area of any other mineral deposits apart from gold and the Company
shall be given the first option to prospect further and to work the
said minerals, subject to satisfactory arrangements between the
Government and the Company.
(b) Failing any such satisfactory arrangements the Company shall not
produce any minerals from the Lease Area other than gold except
where they are unavoidably linked with the production of gold.
7. SAMPLES:
(a) The Company shall not during the currency of this agreement remove,
dispose of or destroy, except in analyses, any cores or samples
obtained from the Lease Area without the prior consent in writing of
the Chief Inspector of Mines.
(b) The Company shall provide the Director of Geological Survey with
such samples from the Lease Area as he may from time to time
reasonably request, and shall keep such samples as he may be
directed to do so by the Chief Inspector of Mines.
8. HEALTH, SAFETY AND ENVIRONMENTAL PROTECTION:
(a) The Company shall comply with all such reasonable instructions as
may from time to time be given by the Chief Inspector of Mines for
securing the health and safety of persons engaged in or connected
with the operations hereunder.
(b) The Company shall adopt all necessary and practical precautionary
measures to prevent undue pollution of rivers and other potable
water and to ensure that such
-5-
pollution does not cause harm or destruction to human or animal life
or fresh water fish or vegetation.
9. POWER OF CHIEF INSPECTOR OF MINES TO EXECUTE CERTAIN WORKS:
If the Company shall at any time fail to comply with any provisions of
this Agreement or applicable law and such failure is likely, in the
opinion of the Chief Inspector of Mines, to:
(i) endanger the health or safety of persons, or
(ii) endanger the environment, or
(iii) cause harm or destruction to potable water; or
(iv) result in damage to mining equipment or other structures or
installation; the Chief Inspector of Mines; shall after giving
the Company reasonable notice, execute any works which in his
opinion are necessary and practicable in the circumstances and
the costs and expenses of such works shall be borne by the
Company.
10. LIABILITY FOR DAMAGE OR INJURY AND INDEMNITY:
(a) Nothing in this Agreement shall exempt the Company from liability
for any damage, loss or injury caused to any person, property or
interest as a result of the exercise by the Company of any rights or
powers granted to it under this Agreement.
(b) The Company shall at all times indemnify the Government and its
officers and agents against all claims and liabilities in respect of
any loss suffered by or damage done to third parties arising out of
the exercise by the Company of any rights or powers granted to it
under this Agreement provided that the Company shall not so
indemnify the Government, its officers and agents where the claim or
-6-
liability arises out of the wrongful or negligent acts of the
Government, its officers and agents.
11. EMPLOYMENT AND TRAINING:
(a) Citizens of Ghana shall be given preference for employment by the
Company in all phases of its operations hereunder to the maximum
possible extent, consistent with safety, efficiency and economy.
(b) Except with respect to unskilled personnel, the Company may employ
non-Ghanaian personnel in the conduct of its operations provided
that the number of such non-Ghanaian personnel employed shall not
exceed the quota permitted by the Government.
(c) The Company shall provide appropriate programmes of instruction and
theoretical and practical training to ensure the advancement,
development, improved skills and qualification of Ghanaian employees
in all categories of employment.
12. PREFERENCE FOR GHANIAN GOODS AND SERVICES
In the conduct of its operations and in the purchase, construction and
installation of facilities, the Company shall give preference to:
(a) materials and products made in Ghana, if such materials and products
are comparable or better in price, quality and delivery dates than
materials and products from foreign sources;
(b) service agencies located in Ghana owned by Ghanaian citizens or
companies organized pursuant to Ghanaian law, including but not
limited to, insurance agencies, bidding contractors, import brokers,
dealers and agents if such agencies give or provide equal or better
price and quality of service than competing foreign firms and can
render services at such times as the Company may require.
-7-
13. AFFILIATED COMPANY TRANSACTION:
(a) Any services including services in respect of the purchase and
acquisition of materials outside Ghana provided by an affiliated
company, shall be obtained only at a price which Is fair and
reasonable. The Company shall, at the request of the Minister,
provide such justification of costs as may be required, duly
supported by an Auditor's certificate if necessary.
(b) Any other transactions between the Company and an affiliated company
shall be on the basis of competitive international prices and upon
such terms and conditions as would be fair and reasonable had such
transactions taken place between unrelated parties.
(c) The Company shall notify the Minister of any and all transactions
between the Company and an affiliated company and shall supply such
details relating to such transactions as the Minister may by notice
reasonably require.
14. TECHNICAL RECORDS:
(a) The Company shall maintain at its registered or mine offices
complete records of the workings in such form as may from time to
time be approved by the Chief Inspector of Mines, Chief Executive of
the Minerals Commission and the Director of Geological Survey.
(b) The Company shall maintain at the said offices copies of all reports
including interpretations dealing with gold and other precious
minerals prospects in the Lease Area in the course of its operations
hereunder and copies of all tests and analyses, geological and
geophysical maps, diagrams or charts relevant to its operations
hereunder. These reports and records may be examined by persons in
-8-
the service or acting on behalf of the Government and authorized in
writing by the Minister.
(c) The Company shall maintain at the said offices correct and
intelligible plans and sections of all mines which plans and
sections shall show the operations and workings which have been
carried on as well as ▇▇▇▇▇, veins, faults and other disturbances
which have been encountered in such workings, and operations. All
such plans and sections shall be made, amended and completed from
actual surveys conducted for that purpose.
(d) Upon expiration or termination of this Agreement or the surrender of
any part of the Lease Area, such records and data as are required to
be maintained pursuant to this paragraph which relate to the Lease
Area, or such part of the Lease Area as may have been surrendered
shall be delivered to the Chief Inspector of Mines, Chief Executive
of the Minerals Commission and the Director of Geological Survey and
shall become the property of the Government without charge.
15. PRODUCTION RECORDS:
The Company shall maintain at its registered or mine offices complete and
accurate technical records of its operations and production in the Lease
Area in such form as may from time to time be approved by the Chief
Inspector of Mine.
16. FINANCIAL RECORDS:
(a) The Company shall maintain at its registered or mine offices
detailed and complete accounts and systematic financial records of
its operations as may be required by law. The books of account shall
show all revenues received by the Company from all sources including
its operations hereunder, as well as all its
-9-
expenditure. The Company shall provide for a clear basis for
understanding and relating the financial records and accounts to its
operations.
(b) The Company's books of account shall be kept on the basis of
generally accepted accounting principles.
(c) The Company shall keep separately records and financial statements
in terms of Ghana currency and also in terms of U.S. Dollars or
other international currency and may record in foreign currency such
claims and liabilities as arise in such foreign currency.
(d) The Company's books of account shall be audited within six (6)
months after the close of each Financial Year by a qualified
Accountant and member of the Ghana Institute of Chartered
Accountants. Such auditing shall not in any way imply acceptance of
its results by the Government or preclude the Government from
auditing such books of account. The Company shall deliver to the
Minister without charge, copies of all or any part of such financial
records as he may from time to time reasonably request.
17. REPORTS:
(a) The Company shall furnish a report each quarter, to the Minister,
the Chief Inspector of Mines, the Chief Executive of the Minerals
Commission and the Director of Geological Survey, in such forms as
may from time to time be approved by the Minister, regarding the
quantities of gold and other precious minerals won in that quarter,
quantities sold, the revenue received and royalties payable for that
quarter and such other information as may be required. Such reports
shall be submitted not later than thirty (30) days after the end of
each quarter.
-10-
(b) The Company shall furnish a report each half-year to the Minister,
the Chief Inspector of Mines, the Chief Executive of the Minerals
Commission and the Director of Geological Survey in such form as may
from time to time be approved by the Minister summarising the
results of its operations in the Lease Area during the half-year and
records to be kept by the Company pursuant to paragraphs 14, 15 and
16 hereof. Each such report shall include a description of any
geological or geophysical work carried out by the Company in that
half-year and a plan upon a scale approved by the Chief Inspector of
Mines showing dredging areas and mine workings. Such reports shall
be submitted not later than forty (40) days after the half-year to
which they relate.
(c) The Company shall furnish a report each Financial Year in such form
as may from time to time be approved by the Minister to the Chief
Inspector of Mines, the Chief Executive of the Minerals Commission
and the Director of Geological Survey Department summarising the
results of its operations in the Lease Area during that Financial
Year and the records required to be kept by the Company pursuant to
paragraphs 14, 15, and 16 hereof. Each such report shall include a
description of the proposed operations for the following year with
an estimate of the production and revenue to be obtained therefrom.
Such reports shall be submitted not later than sixty (60) days after
the end of each Financial Year.
(d) The Company shall furnish the Minister, the Chief Inspector of
Mines, the Chief Executive of the Minerals Commission and the
Director of Geological Survey not later than three (3) months after
the expiration or termination of this Agreement, with a report
giving an account of the geology of the Lease Area including the
-11-
stratigraphic and structural conditions, together with a geological
map on a scale prescribed in the Mining Regulations.
(e) The Company shall furnish the Minister and the Chief Executive of
the Minerals Commission, with a report of the particulars of any
proposed alteration to its regulations. The Company shall also
furnish the Minister and the Chief Executive of the Minerals
Commission with a report on the particulars of any fresh issues of
shares of its capital stock or borrowings in excess of an amount
equivalent to the Stated Capital of the Company. All such reports
shall be in such form as the Minister may require and shall be
submitted not less than twenty-one (21) days (or such lesser period
as the Minister may agree) in advance of any proposed alteration,
fresh issue or borrowing, as the case may be.
(f) The Company shall, not later than 180 days after the end of each
Financial Year, furnish the Minister and the Chief Executive of the
Minerals Commission with a copy each of its annual financial reports
including a balance sheet, profit and loss account, and all notes
pertaining thereto, duly certified by a qualified accountant who is
a member of the Ghana Institute of Chartered Accountants. Such
certificate shall not in any way imply acceptance of such reports by
the Government or preclude the Government from auditing the
Company's books of account.
(g) The Company shall furnish the Minister, the Chief Inspector of
Mines, the Chief Executive of the Minerals Commission and the
Director of Geological Survey with such other reports and
information concerning its operations as they may from time to time
reasonably require.
-12-
18. INSPECTION:
(a) Any person or persons in the service of or acting on behalf of the
Government and authorized in writing by the Minister shall be
entitled at all reasonable times to enter into and upon any part of
the Lease Area and the Company's registered office, for any of the
following purposes:
(i) to examine the mine workings, equipment, buildings,
installation and any other structures used in the mining
operation;
(ii) to inspect the samples which the Company is required to keep
in accordance with the provisions of this Agreement;
(iii) to inspect and check the accuracy of the weights and measures
and weighing and measuring devices, used or kept by the
Company;
(iv) to examine and make abstracts of the books and records kept by
the Company pursuant to this Agreement;
(v) to verify or ensure compliance by the Company with all
applicable laws and regulations and with its obligations
hereunder;
(vi) to execute any works which the Chief Inspector of Mines may be
entitled to execute in accordance with the provisions of the
Mining Laws and Regulations of Ghana, or of this Agreement.
(b) The Company shall make reasonable arrangements to facilitate any
such work or inspection, including making available employees of the
Company to render assistance with respect to any such work or
inspection. All such works and inspections shall be listed by the
Company in the reports and furnished each half year.
-13-
19. CONFIDENTIAL TREATMENT:
The Government shall treat all information supplied by the Company
hereunder as confidential for a period of five (5) years from the date of
submission of such information or upon termination of this Agreement
whichever is sooner and shall not reveal such information to third parties
except with the written consent of the Company which consent shall not be
unreasonably withheld. The Government and persons authorized by the
Government may nevertheless use such information received from the Company
for the- purpose of preparing and publishing general reports on Minerals
in Ghana and in connection with any dispute between the Government and the
Company.
20. FINANCIAL OBLIGATIONS:
(a) Consideration Fees
The Company shall, in consideration of the grant of the Mining Lease pay
to Government an amount of US$30,000.00 (thirty thousand U.S. Dollars).
(b) Rent
The Company shall pay rent (which shall be subject to review) at the rate
of C56,350.00 (fifty six thousand three hundred and fifty cedis) i.e.
((cent)5,000 per square kilometre).
(i) the said rent shall be paid half yearly in advance on or before the
first day of January and on or before the first day of July in each
year.
(ii) in the event of a surrender of any part of the Lease Area pursuant
to paragraph 25 hereof, no rental payments shall be refunded in
whole or in part of any area so surrendered for which yearly rental
has been paid in advance or shall rental payments be refunded in the
event of termination.
-14-
21. ROYALTIES:
(a) The Company shall pay to the Government royalty as prescribed by
legislation.
(b) The Company shall pay royalty to the Government each quarter through
the Commissioner of Internal Revenue based on the production for
that quarter, within thirty (30) days from the end of the quarter.
Any necessary adjustments shall be made annually within sixty (60)
days of the end of each Financial Year, except that any overpayment
of royalty shall not be refunded by the Government but shall be
credited against royalty due and payable in the next quarter.
(c) In the event of a dispute with respect to the amount of royalty
payable hereunder, the Company shall first make payment of the lower
of the disputed amounts and shall pay forthwith any further royalty
which shall be agreed upon or determined to be payable by
arbitration in accordance with paragraph 35 hereof. Such further
royalty shall carry interest to be agreed upon or at the ruling
prime rate in Ghana at the time of the award or agreement to take
effect from the date on which such amount ought originally to have
been paid.
(d) The Company shall also pay royalty on all timber felled by the
Company in accordance with existing legislation.
22. LATE PAYMENTS.
(a) Anything herein contained to the contrary notwithstanding, the
Company shall pay as penalty for any late payment of any amounts due
to the Government hereunder, an additional amount calculated at the
Bank of Ghana re-discount rate for every thirty-day period or part
thereof for the period of the delay in paying the
-15-
amounts, that is to say, the period between the actual payment date
and the date on which each such payment should have been made.
(b) In the event the Company shall fail to make payment to the
Government of any amount due hereunder, the Government without
prejudice to any other rights and remedies to which it may be
entitled, may, after giving 30 days notice in writing, enter into
and upon the Lease Area and seize and distrain and sell as landlords
may do for rent in arrears, all or any of the stocks of gold
produced therefrom, and the plant and equipment, materials and
supplies belonging to the Company which shall be thereon; and out of
the monies obtained from the sale in respect of such distress may
retain and pay all of the arrears of any amounts due hereunder and
the costs and expenses incidental to any such distress and sale and
deliver up the surplus (if any) to the Company.
23. TAXATION:
(a) The Company shall not be required to deduct or withhold any taxes
from any payment made from its external account of which is
authorized under the terms of the Minerals and Mining Law of:
(i) any interest or other costs or fees paid in respect of any
borrowing by or on behalf of the company in foreign currency
for the project;
(ii) any dividends paid to the shareholders.
(b) Save for the above, the Company shall pay tax in accordance with the
laws of Ghana.
24. FOREIGN EXCHANGE:
All foreign exchange transactions shall be in accordance with the laws of
Ghana.
-16-
25. SURRENDER:
(a) The Company may surrender at any time and from time to time, by
giving not less than three months' notice to the Minister, all its
rights hereunder in respect of any part of the Lease Area not larger
in the aggregate than 20% of the said Area. The Company may
surrender a larger part of the Lease Area by giving not less than
twelve (12) months' notice to the Minister. The Company shall be
relieved of all obligations in respect of the part or parts of the
Lease Area so surrendered except those obligations which accrued
prior to the effective date of surrender.
(b) The Company shall leave the part of the Lease Area surrendered and
everything thereon in a good and safe condition, provided, however
that the Company shall have no such obligations for areas
surrendered on which the company has not undertaken any works or
which have not been affected by the operations of the Company. The
Company shall take all reasonable measures, in accordance with good
mining practices to leave the surface of such part of the Lease Area
surrendered, in good and usable condition having regard to the
ecology, drainage, reclamation and the protection of the
environment. In the event that the Company fails to do so, the
Minister shall make such part and everything thereon safe and in
good, usable condition at the expense of the Company. The provisions
of sub-paragraphs (a) and (c) of paragraph 29 hereof shall apply.
(c) The Company shall, on such terms and conditions as may be agreed
upon between the Government and the Company, be entitled to such
wayleaves, easements or other rights through or across the
surrendered part or parts as may be necessary for its operations and
such wayleaves shall not form part or be included in the calculation
of the area of the retained part.
-17-
(d) The Government may require that there be reserved over any part
surrendered such wayleaves, easements or other rights as will in its
opinion be necessary or convenient to any party to whom the
Government may subsequently grant a prospecting licence or mining
lease.
26. EXTENSION:
If the Company, not less than six (6) months before the expiration of this
Agreement, applies to the Minister for an extension of the term hereof and
if the Company shall not be in default at that time in the performance of
any of its obligations hereunder, the Company shall be entitled to an
extension of the period of this Agreement upon such terms and conditions
as the parties may then agree.
27. COMPANY'S RIGHT TO TERMINATE AGREEMENT:
The Company may, if in its opinion the mine can no longer be economically
worked, terminate this Agreement by giving not less than nine (9) months'
notice to the Government. Such termination shall be without prejudice to
any obligation or liability incurred by the Company hereunder prior to the
effective date of such termination.
28. GOVERNMENT'S RIGHT TO TERMINATE AGREEMENT:
(a) The Government may, subject to the provisions of this paragraph,
terminate this Agreement if any of the following events shall occur:
(i) the Company shall fail to make any of the payments provided
for in this Agreement on the payment date;
(ii) the Company shall contravene or fail to comply with any other
provisions of this Agreement; or
(iii) the Company shall become insolvent or bankrupt or enter into
any agreement or composition with its creditors or take
advantage of any law
-18-
for the benefit of debtors or go into liquidation, whether
compulsory or voluntary, except for the purposes of
reconstruction or amalgamation; or
(iv) the Company makes a written statement to the Government on any
material matter in connection with this Agreement or with its
operations which the Company knows to be false or makes
recklessly without due regard as to whether it was true or
false.
(b) If and whenever the Government decides there are grounds to
terminate this Agreement pursuant to clauses (i) and (ii) of the
preceding sub-paragraph, the Government shall give the Company
notice specifying the particular contravention or failure and permit
the Company to remedy same within three (3) months of such notice,
or such longer period as the Minister may specify in such notice as
being reasonable in the circumstances.
(c) If the Company shall fail to remedy any event specified in clauses
(i) and (ii) of sub-paragraph (a) of this paragraph within the
stated period, or an event specified in clauses (iii) and (iv) of
the said sub-paragraph shall occur, the Government may by notice to
the Company terminate this Agreement, provided that if the Company
disputes whether there has been any contravention or failure to
comply with the conditions hereof (including any dispute as to the
calculation of payments by the Company to the Government hereunder),
and the Company shall, within such period as aforesaid refer the
dispute to arbitration in accordance with paragraph 35 hereof and,
thereafter, diligently prosecute its claim thereunder, the
Government shall not terminate this Agreement except as the same may
be consistent with the terms of the arbitration award.
-19-
(d) No delay or omission or course of dealing by the Government shall
impair any of its rights hereunder or be construed to be a waiver of
any event specified in sub-paragraph (a) of this paragraph or an
acquiescence therein.
(e) Upon termination of this Agreement, every right of the Company
hereunder shall cease (save as otherwise specifically provided
hereunder) but subject nevertheless and without prejudice to any
obligation or liability imposed or incurred under this Agreement
prior to the effective date of termination and to such rights as the
Government may have under the law.
29. ASSETS ON TERMINATION OR EXPIRATION:
(a) Upon the termination or expiration of this Agreement, immovable
assets of the Company in the Lease Area and all other appurtenances,
pits, trenches and boreholes shall on the effective date of
termination or expiration, become the property of the Government
without charge.
(b) All materials, supplies, vehicles and other movable assets of the
Company in the Lease Area which are fully depreciated for tax
purposes, shall become the property of the Government without charge
on the effective date of termination or expiration. Any such
property which is not then fully depreciated for tax purposes shall
be offered for sale to the Government within sixty (60) days from
the effective date of such termination or expiration at the
depreciated cost. If the Government shall not accept such offer
within sixty (60) days, the Company may sell, remove or otherwise
dispose of all such property within a period of one hundred and
eighty (180) days after the expiration of such offer. All such
property not sold, removed or otherwise disposed of shall become the
property of the Government without charge.
-20-
(c) Notwithstanding the foregoing, the Minister, may by notice to the
Company require the, removal or destruction of any assets of the
Company in the Leased Area, and if the Company does not remove or
destroy such assets within a period of thirty (30) days from the
date of the Minister's notice to that effect, the Minister shall
cause such removal or destruction at the expense of the Company.
(d) The Company shall take all reasonable measures to ensure that all of
the assets to be offered for sale to the Government or transferred
to the Government in accordance with this paragraph shall be
maintained in substantially the same condition in which they were at
the date of the termination or the date on which the Company
reasonably knew that such termination would occur and any such
assets shall not be disposed of, dismantled or destroyed except as
specifically provided for in this paragraph.
(e) Upon the termination or expiration of this Agreement, the Company
shall leave the Lease Area and everything thereon in good condition,
having regard to the ecology, drainage, reclamation, environmental
protection, health and safety; provided however that the Company
shall have no obligation in respect of areas where the Company has
not undertaken any work or which have not been affected by the
Company's operations. In this connection, unless the Chief Inspector
of mines otherwise directs, the Company shall, in accordance with
good mining practices, fill up or fence and make safe all holes and
excavations to the reasonable satisfaction of the Chief Inspector of
Mines. In addition the Company shall take all reasonable measures to
leave the surface of the Lease Area in usable condition and to
restore all structures thereon not the property of the Company to
-21-
their original condition. In the event that the Company fails to do
so, the Minister shall restore and make safe the Lease Area and
everything thereon at the expense of the Company.
(f) The Company shall have the right to enter upon the Lease Area for
the aforesaid purposes, subject to the rights of surface owners or
others, for a period of six (6) months from the effective date of
the termination or such longer period as the Minister may decide.
30. FORCE MAJEURE:
(a) All obligations on the part, of the Company to comply with any of
the conditions herein (except the obligation to make payment of
monies due to the Government) shall be suspended during the period
the Company is prevented by force majeure from fulfilling such
obligations, the Company having taken all reasonable precautions,
due care and reasonable alternative measures with the objective of
avoiding such non-compliance and of carrying out its obligations
hereunder. The Company shall take all reasonable steps to remove
such causes of the inability to fulfil the terms and conditions
hereof with the minimum of delay.
(b) For the purpose of this paragraph, force majeure includes Government
restraints not arising from the non-compliance by the Company with
the conditions herein, acts of God, war, strikes, insurrection,
riots, earthquakes, storm, flood or other adverse weather conditions
or any other event which the Company could not reasonably be
expected to prevent or control, but shall not include any event
caused by a failure to observe good mining practices or by the
negligence of the Company or any of its employees or contractors.
-22-
(c) The Company shall notify the Minister within forty-eight (48) hours
of any event of force majeure affecting its ability to fulfil the
conditions hereof or of any events which may endanger the natural
resources of Ghana and similarly notify the Government of the
restoration of normal conditions within forty-eight hours of such
restoration. This provision shall be in addition to any requirements
contained in the Mining Regulations in force in Ghana.
(d) The terms of this Agreement shall be extended for a period of time
equal to the period or periods during which the company was affected
by conditions set forth in the sub-paragraph (a) and (b) of this
paragraph or for such period as may be agreed by the parties.
31. POLITICAL ACTIVITY:
The Company shall not engage in political activity of any kind in Ghana or
make a donation, gift or grant to any political party. The Company shall
make it a condition of employment that no employee, other than a citizen
of Ghana shall engage in political activity and shall not make donations,
gifts or grants to any political party. In the event of any such employee
acting in disregard to this condition, he shall be dismissed forthwith.
32. ADVERTISEMENTS, PROSPECTUSES, ETC.:
Neither the Company nor any affiliated Company shall in any manner claim
or suggest, whether expressly or by implication that the Government or any
agency or official thereof, has expressed any opinion with respect to gold
in the Lease Area and no statement to this effect shall be included in or
endorsed on any prospectus notice, circular, advertisement, press release
or similar document issued by the Company or any affiliated Company for
the purpose of raising new capital.
-23-
33. CO-OPERATION OF THE PARTIES:
Each of the parties hereto undertake that it will from time to time do all
such acts and make, enter into, execute, acknowledge and deliver at the
request of the other party, such supplemental or additional instruments,
documents, agreements, consents, information or otherwise as may be
reasonably required for the purpose of implementing or further assuring
the rights and obligations of the other party under this Agreement.
34. NOTICE:
Any application, notice, consent, approval, direction, instruction or
waiver hereunder shall be in writing and shall be delivered by hand or by
registered mail. Delivery by hand shall be deemed to be effective from the
time of delivery and delivery by registered mail shall be deemed to be
effective from such time as it would in the ordinary course of registered
mail be delivered to the addressee.
35. ARBITRATION AND SETTLEMENT OF DISPUTES:
(a) Any dispute between the parties in respect of the interpretation or
enforcement of the provisions of this document shall he settled in
accordance with the procedures available in Ghana for the settlement
of such dispute; provided that at the instance of either of the
parties any such dispute may be submitted for settlement by
arbitration under the Arbitration Rule of the United Nations
Commission on International Trade Law (the "UNCITRAL Rule").
(b) Any arbitration under the UNCITRAL Rules shall be by three (3)
arbitrators unless the parties agree to a single arbitrator. The
place of arbitration shall be Accra and the proceedings shall be in
English unless the parties otherwise agree. Ghana Law shall be the
law applicable to the proceedings.
-24-
(c) Nothing in clause 35(a) or 35(b) shall prevent either of the parties
from requesting any judicial authority to order provisional measures
prior to the initiation of arbitration proceedings or during the
proceedings for the preservation of their respective rights.
(d) The parties acknowledge and that this Agreement was made on the
basis of the laws and conditions prevailing at the date of the
effective conclusions of the negotiation of this Agreement and
accordingly, if thereafter, new laws and conditions come into
existence which unfairly affect the interest of either party to this
Agreement, then the party so unfairly affected shall be entitled to
-25-
THIS IS THE PLAN REFERRED TO
IN THE ANNEXED MINING LEASE
DATED THIS 29TH DAY OF JUNE 2001
THE HON. MINISTER OF LANDS, FORESTRY & MINES.