EG Mining Exploitation Contract

CONTRACT FOR
MINERAL EXPLOITATION LICENCE
BETWEEN
THE REPUBLIC OF EQUATORIAL

GUINEA
AND
…………………………………………………………………………………..
Contract No. METL2019/xx

Contract for Mineral Exploitation Licence Ministry of Mines and Hydrocarbons
Republic of Equatorial Guinea
INTRODUCTION
This contract is signed on the …… day of ………….., 20….., between the Ministry of
Mines and Hydrocarbons of the Republic of Equatorial Guinea (hereafter called
‘Ministry’) represented by His Excellency,
the Minister ………………………………………………………………………. and
…………………………………………………………………………………………..
a Company created and registered under the Laws of……………………………
(hereafter called ‘Contractor’), and represented by
the Representative………………………………………………………………………
in position of ……………………………………………… in the Company.
Hereafter the Ministry and Contractor will be referred to in singular as ‘Party’ and in
the plural as ‘Parties’.
WHEREAS
All the mineral resources existing in the Republic of Equatorial Guinea, surface and
sub-surface, including all areas underwater, belong to the State. The State through the
Ministry wishes to promote and develop the mining sector and the Contractor wishes
to associate with the Ministry and collaborate with it in the matter of exploiting the
mineral potential of a Prospect Area recently explored and still retained by the
Contractor, the area henceforth to be referred to as the Exploitation Area. The
Contractor has the financial capacity, technical skill and scientific knowledge
necessary to perform the mineral exploration, evaluation, and exploitation that is the
subject of this contract.
The Mining Law of the Republic of Equatorial Guinea (Law No. 09/2006 dated 3
November 2006) authorises the Ministry to negotiate and sign Contracts with national
and foreign companies.
By virtue of the arrangements expressed in this contract the Parties agree to the
following:
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SECTION 1
MEANING AND DEFINITIONS
1.1 MEANING
This Contract is a Contract for Mineral Exploitation that allows the Contractor to
mine or otherwise extract the mineral or minerals for which the Prospect Area or
contiguous Prospect Areas were originally reserved. In this regard, the Contractor:
i) is responsible to the Ministry for undertaking the exploitation of the mineral or
minerals according to this Contract. By the present Contract, the Contractor is
appointed as Operator in the Exploitation Area for the duration of this
Contract;
ii) supplies all equipment and personnel required to perform all necessary works
for the exploration program;
iii) is responsible for all costs and expenditure necessary for the full and sensible
implementation of the exploitation program and for all subsequent remediation
that may be necessitated after cessation of the exploitation.
1.2 DEFINITIONS
- Commodity Type: for the purpose of this Contract, diamonds are considered a
separate commodity type to all other mineral commodities. The Contractor may
exploit diamonds or all other mineral commodities as declared upon signing the
Contract for the original Prospect Area within which the proposed Exploitation
Area now occurs. Only those commodities defined in Annexe B of this Contract
can be the subject of Exploitation under the conditions of this Contract.
- Data: All geological, geophysical and minerals exploration data generated by the
Contractor during the period of the Contract.
- Date of Issue: this is the date of signing of this Contract.
- Duration: the period of the Exploitation Licence, not exceeding twenty (20) years,
subject to the approval of the Ministry on submission of a full Exploitation Plan
by the Contractor.
- Exploitation Area: that area within the Prospecting Area and additional
contiguous areas reserved, as deemed appropriate by the Ministry and defined
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within the Exploitation Plan, for the exploitation of the identified resource and for
all necessary related activities including waste-product disposal and construction
of plant, offices, and any other buildings.
- Exploitation Licence: an agreement ratified by the Ministry permitting the
Contractor and the Contractor’s identified agents and sub-contractors the
exclusive right to exploit an identified mineral resource within the agreed
Exploitation Area and in full compliance with the Exploitation Plan as agreed by
the Ministry.
- Exploitation Plan: a proposal submitted by the Contractor and approved by the
Ministry for the exploitation of the mineral resource by the Contractor with all due
diligence, with due regard for the health and safety of all employees, and with due
regard for mitigation of environmental impact and for all necessary remediation
and rehabilitation during and after exploitation.
- Evaluation: All activities, including research, interpretation, modelling,
geochemical and geophysical surveys, trenching, pitting, chemical analysis and
other fieldwork necessary for identification and determination of economically
exploitable mineral occurrences.
- Minerals: Any naturally occurring element or compound of non-biological origin,
having an ordered atomic structure and characteristic chemical composition,
physical properties and crystal form. Commodities not covered by this definition,
but included as minerals for the purpose of this Contract include: limestone,
dolomite, coal and lignite, opal.
- Prospect Area: An area of areal extent that shall neither cover less than one
hundred (100) hectares for all minerals nor exceed twenty-five thousand (25,000)
hectares for all minerals, including diamonds that the Operator identifies as having
potentially exploitable mineral occurrences. Contiguous Prospect Areas may be
reserved subject to the approval of the Ministry. Land Rental fees are payable on a
yearly basis and the Operator retains the ground on the basis of expenditure and
work completed each year as approved by the Ministry.
- Prospecting Licence: an agreement ratified by the Ministry permitting the
Contractor the exclusive right to undertake all activities relevant to the search for
and definition of mineral resources in a Prospect Area.
- Relinquishment: The process by which the Operator selects parts of the Contract
Area in which no further exploration effort is warranted. The remaining re-defined
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Contract Area should be attached as an Addendum to Annexe A. Relinquished

Areas are no longer licensed to the Operator.
- Royalty: It means the financial compensation that is paid to the State for the
exploitation of mining resources or construction materials
- Surface Area Fees: As defined in Article 46 of the Mining Law and referred to as
Land Rent in article 3.6 of this Contract.
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SECTION 2
DATE OF ISSUE, RENEWAL, AND CANCELLATION

OF THIS CONTRACT
2.1 The Contractor is allowed to undertake exploitation of mineral resources and

any necessary further exploration activities to define additional resources
within the Exploitation Area (Annexe A) according to the agreed Exploitation
Plan authorised by the Ministry (Annexe B).
2.2 The Exploitation Licence shall be granted for a period not exceeding twenty
(20) years and according to the agreed Exploitation Plan authorised by the
Ministry (Annexe B).
2.3 The Contractor may, at any time not later than one year before the expiry of
the Exploitation Licence, apply for renewal of the Licence in respect of any or
all of the Exploitation Area. The application shall be accompanied by a new
Exploitation Plan (Annexe B), which shall include a complete inventory of the
current mineral resource.
2.4 The Contractor may, at any time not later than one year before the expiry of
the Exploitation Licence, apply to extend the area of the Exploitation Area
through submission to the Ministry of a further plan (Exploitation Programme
– Extension) detailing in full the requirements, justification, and all other
relevant factors.
2.5 The Ministry has the right to cancel this Contract, with written notice to the
Contractor of a minimum of thirty (30) days, if:
a) Contractor fails to pay any financial commitments recognised by the
Law, or by this Contract thirty (30) days beyond the normal payment
date stated in this Contract;
b) Contractor does not fulfil the obligations defined in this Contract;
c) Contractor Company is liquidated as a consequence of insolvency;
d) Contractor has not begun work operations, administrative or technical,
within sixty (60) days of the date of issue of the Contract.
e) Contractor fails to undertake the agreed Exploitation Plan during the
validity period.
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2.6 If the Contractor can remedy the circumstances leading to the Cancellation of
Contract (as described in Section 2.5 above) within thirty (30) days of the
written notice of Cancellation, the Ministry will consider rescinding the
Cancellation Order.
2.7 If the circumstances leading to the Cancellation of Contract (as described in
Section 2.5 above) are the result of Force Majeure (as defined in Section 9),
the Ministry will suspend both the Cancellation Order and the time lapsed on
the Contract until the Force Majeure situation has been resolved and the
Contractor is able to resume the Contract.
2.8 The Cancellation of the Contract does not excuse the Contractor from any
obligations in force prior to the date of Cancellation.
2.9 This Contract shall be deemed to have terminated under the following
circumstances:
a) upon completion of the final year of the Exploitation Contract, where
the Operator chooses not to apply for a renewal;
b) upon submission by the Contractor, at least thirty (30) days in advance,
that Contractor wishes to terminate the Contract prematurely.
c) cancellation of the Contract by the Ministry (see Section 2.5).
In all cases the Contractor shall have to demonstrate to the Ministry’s
satisfaction that all legal, financial, and other requirements of the Contract
have been fulfilled prior to the date of termination. Under clause (b) above,
the Contractor will have to demonstrate that operations have been undertaken
with due regard for mitigation of environmental impact and remains
responsible for all necessary remediation and rehabilitation during and after
exploitation.
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SECTION 3
PROGRAM OF WORKS AND EXPENDITURE
3.1 The Contractor is obliged to commence activities, as approved by the Ministry

and declared in the Exploitation Plan, within sixty (60) days of signing of the
Contract.
3.2 The Contractor shall only exploit the mineral commodity or commodities
specified in this Contract (Annexe B).
3.3 The Contractor has the right to hire any staff or sub-contractors required to
perform geological and other technical work relating to the exploitation, and
will only hire staff qualified to perform the duties allocated. Such staff and
sub-contractors will be bound by the Law of Equatorial Guinea. The
Contractor will notify the Ministry of the names and relevant professional
details of any and all sub-contractor(s) within fifteen (15) days of the sub-
contractor(s) commencing employment.
3.4 The Contractor shall give notice to the Ministry at least ninety (90) days in
advance if, without termination of the Exploitation Licence, it is proposed to
suspend production from the site, and shall provide full reasons for such
suspension.
3.5 The Contractor shall pay non-refundable Land Rent to the National Treasury
annually at a rate of US$5.00 per hectare for an Exploitation Area. Monies are
to be paid immediately upon signing of this Contract. A similar amount is due
payable for each and every extension to this Contract.
3.7 Consequent upon production of one or more minerals, the Contractor shall:
i) submit to the Ministry, on a monthly basis, full details of all mineral
production, specifying mass and tenor (grade) in terms of metal or
mineral content;
ii) provide to the Ministry, on a monthly basis, full details of all sales of
minerals and revenues realised;
iii) pay an annual ad valorem royalty of *% on all mineral sales (to be
negotiated, capped at 5%). Such payment shall be over and above all
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corporate taxes and other levies as usually raised by the State on

corporate bodies.
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SECTION 4
RIGHTS AND OBLIGATIONS OF THE PARTIES
4.1 Within thirty (30) days following the Effective Date, Contractor shall open a
branch office in the Republic of Equatorial Guinea and keep it in existence
during the term of this Contract. Said office shall be manned by at least one
representative with enough authority to make decisions on behalf of the
Contractor.
4.2 The Contractor shall develop the Exploitation Area and undertake all
exploitation activities with due diligence and in full compliance with the
Exploitation Plan as approved by the Ministry.
4.3 The Contractor shall demarcate the Exploitation Area and maintain such
demarcation in the prescribed manner at all times.
4.4 The Contractor is obliged to submit an annual report of exploitation and
related activities (Annexe C) to the Ministry no later than sixty (60) days after
the end of each year of this Contract, and no later than sixty (60) days after
termination of the Contract.
4.5 The Contractor shall undertake all exploration, evaluation, and exploitation
activities in a manner appropriate to best practise in the international minerals
industry. Amongst other requirements this will necessitate the operations be
undertaken with due regard for mitigation of environmental impact and
Contractor remains responsible for all necessary remediation and rehabilitation
during and after exploitation
4.6 The Contractor, during the Contract period, shall hire and train citizens of
Equatorial Guinea under a programme agreed with the Ministry.
4.7 The Contractor is responsible to seek access directly with landowners. The
Ministry will facilitate as required and act as an intermediary should no
agreement be found
4.8 In the event of any on-site accident involving serious bodily injury or death,
the Contractor shall submit full details to the Ministry within seven (7) days of
such accident.
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SECTION 5
CONFIDENTIALITY
5.1 The Parties agree that, for the duration of the Contract, all information
relating to the minerals exploitation and production programme within the
Exploitation Area (the Data) shall be confidential and cannot be divulged
by either Party without mutual consent. The Data are deemed to be the
property of the State. A copy of newly acquired Data must be sent to the
Ministry within 60 days of acquisition. The Contractor can use the Data
free of charge whilst they remain in the Exploitation License. The Ministry
will not license the data nor make it public until the Contractor
relinquishes it’s interest in the Contract Area.
5.2 Subject to the confidentiality obligations defined in para 5.1, Contractor
may show but not give the Data, or derivatives of the Data:
➢ to the extent it is required by applicable law or by the rules or
regulations of any recognized stock exchange on which the shares
of the Contractor or any of its affiliated companies are listed;
➢ if it is required for the purpose of any arbitration or legal
proceedings or claim relating to this Contract;
➢ to a bona fide prospective partner to, or investor in, a Mining
Contract which Contractor is a party or considering to apply for.
➢ to a bona fide prospective acquiring entity of Contractor.
Any third party to whom Contractor may show the Data and/or Data
derivatives pursuant shall sign an appropriate confidentiality agreement to
protect the interests of Contractor and Ministry .
5.3 No third party other than Contractor’s affiliated companies, shall be
allowed to retain copies of the Data, Data derivatives or information
relating thereto, save for the following outside service providers (subject to
standard confidentiality obligations):
A. Consultants and Reserve Auditors
B. Processors
C. Storage Contractors
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5.4 The Ministry shall not reveal to third parties information protected by
patents or contractual agreements or pertinent to the Contractor’s own
technology.
5.5 This confidentiality clause will not in any way abrogate the State’s legal
obligation to deliver information to international financial institutions
where so required.
5.6 Release of information relevant to the minerals exploitation programme to
the media by either Party shall only be by mutual consent.
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SECTION 6
ARBITRATION
6.1 In the event of any dispute between the Contractor and landowners, the
decision of the Minister shall be final, subject only to the rights of the
Contractor under Section 6.2 (below).
6.2 In the event of any dispute between the Ministry and Contractor regarding the
interpretation or execution of the provisions of this Contract, the Parties shall
make their best efforts to settle such dispute amicably. If, within three (3)
months of the date of notice of such dispute, the Parties have not reached an
amicable agreement, the matter shall be referred to Arbitration at the
International Chamber of Commerce (ICC).
6.3 The seat of arbitration shall be agreed by the Parties, and if there is a lack of
agreement it shall be determined by the arbitrators. The language used during
the arbitration proceedings shall be the Spanish language and the applicable
law shall be the laws of the Republic of Equatorial Guinea as well as the rules
and practice of international law applicable on the subject matter. The
arbitration tribunal shall consist of three (3) arbitrators, two (2) of whom
designated by each of the Parties and the third to act as the President,
nominated by the International Chamber of Commerce. No arbitrator shall be
a national of the countries to which either Party belongs. Any Arbitration
proceeding initiated in accordance with this agreement shall be carried out
subject to the arbitration rules of the ICC in effect at the time the proceeding
is initiated. The arbitration award shall be definitive and binding for the
Parties and it can be enforced immediately. The arbitration expenses shall be
borne equally by the Parties, subject to the decision of the tribunal regarding
the sharing thereof. The Parties shall conform to any measure of conservation
prescribed or recommended by the arbitration tribunal.
6.4 A request for arbitration shall give rise to the suspension of the contractual
provisions concerning the subject matter of the dispute, but all other rights and
obligations of the Parties under this Contract shall not be suspended.
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SECTION 7
NOTIFICATION
Any notification required or given by either Party to the other will be considered
as delivered upon signature of the receiving party acknowledging receipt. Said
notifications shall be in Spanish and addressed to:
For the Ministry:
Ministry of Mines and Hydrocarbons

Malabo II,
Malabo, Bioko
For Contractor:
Notifications shall be deemed to be delivered on the date the addressee receives them
pursuant to the acknowledgement of receipt.
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SECTION 8
REGULATORY LAW
8.1 This Contract and the Exploitation carried out under the Contract shall be
governed by the laws and regulations in force in the Republic of Equatorial
Guinea.
8.2 Contractor shall be subject at any time to the laws and regulations in force in the
Republic of Equatorial Guinea.
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SECTION 9
FORCE MAJEURE
9.1 Any obligation or condition arising from this Contract which either Party is
prevented from performing whether in whole or part, except with respect to the
payments such Party is liable to, shall not be considered as a breach of this
Contract if said non-performance is caused by an event of Force Majeure,
provided, however, that there is a direct cause-and-effect relationship between the
non-performance and the event of Force Majeure invoked.
9.2 For purposes of this Contract, an event shall be considered Force Majeure if it
meets the following conditions:
(a) It has the effect of temporarily or permanently preventing either of the
Parties from performing its obligations under the Contract; and
(b) It is unforeseeable, unavoidable and beyond the control of the Party which
declares Force Majeure and is not the result of its negligence or omission.
Such an event may include, without limitation, earthquake, strike, riot,
insurrection, civil unrest, sabotage, acts of war or acts attributable to war. The
intent of the Parties is that the term Force Majeure shall be construed as defined
under the principles and practice of the international minerals exploration industry.
9.3 If either Party cannot comply with any obligation or condition herein stipulated
because of Force Majeure, it shall notify the other Party in writing as promptly as
possible, and in any case not later than fourteen (14) days after the event, giving
the reason for its non-compliance, particulars of the Force Majeure and the
obligation or condition affected. The Party affected by the Force Majeure shall
keep the other Party informed from time to time of the evolution of the Force
Majeure occurrence and shall promptly notify the other Party as soon as the Force
Majeure has been removed and no longer prevents it from complying with its
obligation or condition and shall thereafter resume compliance with such
obligation or condition as soon as possible.
9.4 The obligations other than those affected by the event of Force Majeure shall
continue to be performed in accordance with the provisions of this Contract.
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9.5 All obligations suspended as the result of Force Majeure will be completed as
quickly as possible, within a time frame no longer than the length of the time of
the Force Majeure.
9.6 When Force Majeure situation lasts more than ninety days, the Parties will meet to
examine the situation and implications for minerals exploration, in order to
establish the course of action appropriate for the fulfilment of contractual
obligations in the circumstances of the said Force Majeure. In such case, the term
of the Contract will be extended by the same amount of time that the Force
Majeure has lasted.
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SECTION 10
DEFINITIVE AGREEMENT
10.1 This Contract constitutes a definite agreement between the State and the
Contractor and replaces and substitutes any other agreement between the
Parties whether oral or in writing, drawn up prior to the date of Issue of the
same.
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SECTION 11
EFFECTIVE DATE
This Contract shall become effective on the date it is ratified by the State through
signature of the State’s representative below, such date herein referred to as the
Effective Date, and this Contract shall then be binding for the Parties.
In witness whereof, the Parties hereto have executed this Contract in two (2)
original and identical copies in the Spanish language.
FOR MINISTRY OF MINES AND HYDROCARBONS OF

THE REPUBLIC OF EQUATORIAL GUINEA
SIGNATURE: ______________________
NAME: ______________________
TITLE: _______________________
DATE: _______________________
FOR THE CONTRACTOR:
SIGNATURE: _____________________
NAME: _____________________
TITLE: _____________________
DATE: ______________________
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ANNEXE A
CONTRACT AREA
This Annexe is attached to and comprises an integral part of this Contract between the
Ministry and the Contractor.
Upon the Effective Date, the initial Contract Area defines an area deemed equal to
approximately _____ hectares.
Said Contract Area is illustrated on the map appended to this Annexe Scale of the map
must not be less than 1:50,000. The map is an integral part of this Contract between the
Ministry and Contractor.
The points (A,B,C,D, etc)_________________ indicated on said map are defined below:
Reference point Co-ordinates

A
B
C
D
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ANNEXE B
PLAN FOR EXPLOITATION OF MINERAL RESOURCE
This annexe is attached to and comprises an integral part of this Contract between the
Mineral(s) to be exploited:______________________________________________
Mineral resource data

Following international CMMI or JORC definitions.
• Reserves: category, tonnage or volume, in-situ tenor (grade), total recoverable

mineral content.
• Resources: category, tonnage or volume, in-situ tenor (grade).
Schedule
• Commencement date for establishing infrastructure
• Anticipated duration of exploitation activities
Duration of Licence: ________________________________________________
Exploitation programme
Programme to include the following as appropriate:
• Mining method(s) to be employed.
• Details of recovery processes and plant and equipment to be utilised.
• Proposals for waste containment and disposal.
• Provision for the health and safety of employees
• Provision for housing and related amenities.
• Details of capabilities and experience of all senior personnel to be involved in
the exploitation programme on a regular basis.
• Details and capabilities of all sub-contracting companies to be used on site.
• Details of capital investment, production costs, revenue forecasts, discounted
cash flow analysis (as deemed appropriate by Ministry).
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Environmental management
• Environmental impact statement.

• Provision for rehabilitation and remediation during exploitation and at
cessation of exploitation.
Other exploration and evaluation work (general indications only)

• Geophysical surveys
• Geochemical surveys
• Trenching and pitting
• Drilling
• Other works
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ANNEXE C
MINERAL EXPLOITATION CONTRACT: ANNUAL REPORT
This annexe is attached to and comprises an integral part of this Contract between the
The Contractor shall submit a report on the exploitation and related activities
undertaken by the Contractor at the end of each year of the Contract. The report shall
be submitted no later than sixty (60) days after the final day of the Contract year.
The Annual Report shall incorporate the following:
Mineral resource
Following international CMMI or JORC definitions.
• Total resource exploited - mass or volume (as appropriate), head grade, total
mineral(s) recovered.
• Reserve and resource reconciliation – for all categories of reserves and
resources.
Financial statement
• Revenue generated through mineral sales
• Capital expenditure
• Working and other costs
Exploitation and construction

Summary of all mining and excavation activities and on-site construction work,
accompanied by a detailed plan showing the distribution of excavations and
constructions.
Personnel
• Status of work force – numbers employed in all categories; changes in senior
personnel during the year.
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• Health and safety – review of all on-site accidents involving serious bodily injury
or death, and summary of new procedures put in place to avoid repetition of such
accidents. Include also the Contractor’s policy on monitoring and managing
health and safety in the workplace.
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EG Mining Exploitation Contract

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CONTRACT FOR

MINERAL EXPLOITATION LICENCE

THE REPUBLIC OF EQUATORIAL

Contract No. METL2019/xx

MEANING AND DEFINITIONS

Contract Area should be attached as an Addendum to Annexe A. Relinquished

DATE OF ISSUE, RENEWAL, AND CANCELLATION

2.1 The Contractor is allowed to undertake exploitation of mineral resources and

PROGRAM OF WORKS AND EXPENDITURE

3.1 The Contractor is obliged to commence activities, as approved by the Ministry

corporate taxes and other levies as usually raised by the State on

RIGHTS AND OBLIGATIONS OF THE PARTIES

For the Ministry:

Ministry of Mines and Hydrocarbons

FOR MINISTRY OF MINES AND HYDROCARBONS OF

FOR THE CONTRACTOR:

Reference point Co-ordinates

PLAN FOR EXPLOITATION OF MINERAL RESOURCE

Mineral resource data

• Reserves: category, tonnage or volume, in-situ tenor (grade), total recoverable

• Environmental impact statement.

Other exploration and evaluation work (general indications only)

MINERAL EXPLOITATION CONTRACT: ANNUAL REPORT

The Annual Report shall incorporate the following:

Exploitation and construction

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