EXHIBIT 10.9
 
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ERG Project Mineral Rights Agreement
 
Energizer Resources Inc.
Energizer
 
and
 
Malagasy Minerals Limited
Malagasy
 
and
 
Madagascar-ERG Joint Venture (Mauritius) Limited
ERG
 
 
 
Jackson McDonald
140 St Georges Terrace
Perth WA 6000
t:
f:
w:
+61 8 9426 6611
+61 8 9481 8649
www.jacmac.com.au
Contact:
Reference:
Will Moncrieff
7141864

 
 
 

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Table of contents
 
1
Definitions and interpretation
2
 
1.1
Definitions
2
 
1.2
Interpretation
10
2
Conditions
11
 
2.1
Conditions precedent
11
 
2.2
Waiver of Conditions precedent
12
 
2.3
Non-satisfaction of Conditions
12
3
Term
 
12
4
Rights to explore and sublease
12
 
4.1
Grant of Additional Industrial Mineral Rights
12
 
4.2
Minerals Rights interests at Completion
13
 
4.3
Grant of Additional Permits Area Subleases
13
 
4.4
Continuation of JV Subleases and JV Industrial Mineral Rights
14
 
4.5
Transfer of ERG Project Permits
14
 
4.6
Termination of Industrial Minerals Subleases
15
 
4.7
Grant of Other Minerals Subleases
16
 
4.8
Covenants of Permit Holders in respect of the ERG Project Exploration Permits
16
 
4.9
Covenants in respect of the ERG Project Exploration Permits
17
 
4.10
Remedies of Sublessee
18
 
4.11
Exercise of mineral rights
18
 
4.12
Notice of activities
19
 
4.13
Mutual indemnities
20
5
Transfer of Permits
20
6
Mining Operations
20
 
6.1
Decision to Mine
20
 
6.2
Transfer of Mining Area
21
 
6.3
Conversion to Exploitation Permits
21
 
6.4
Transfer of Exploitation Permits
21
 
6.5
Holding of Exploitation Permits
22
 
6.6
Approval of Mining Department
22
 
6.7
Option of Permit Holders to transfer Exploration Permits prior to conversion
22
 
6.8
Avoidance of forfeiture of Tenements
22
7
Environment and Mining Operations
23

 

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8
Other Mineral Rights
23
 
8.1
Holder of Other Mineral Rights
23
 
8.2
Priority of exercise of ERG Project Industrial Mineral Rights
24
 
8.3
Suspension of Other Mineral Rights for duration of Mining Operations
24
 
8.4
Transfer of Other Mineral Rights
24
 
8.5
Transfer of ERG Project Industrial Mineral Rights
24
 
8.6
Co-mingling
25
9
Representations and warranties
26
 
9.1
Representations and warranties by Energizer
26
 
9.2
Representations and warranties by Malagasy
26
 
9.3
Limitation of warranties and disclaimer of liability by Malagasy
28
10
Guarantees
29
 
10.1
Guarantee by Malagasy
29
 
10.2
Guarantee by Energizer
29
11
Assignment
29
12
Termination
30
 
12.1
Event of Default
30
 
12.2
Effect of termination
30
 
12.3
Continuing remedies
31
13
Force Majeure
31
 
13.1
Force Majeure
31
 
13.2
Relief
31
 
13.3
Labour disputes
32
 
13.4
Resumption
32
14
Dispute resolution
32
 
14.1
Application
32
 
14.2
Dispute negotiation
32
 
14.3
Arbitration
33
 
14.4
Urgent relief
33
 
14.5
Continued performance
33
15
Disputes as to Technical or Financial Matters
33
 
15.1
Definitions
33
 
15.2
Application
34
 
15.3
Dispute negotiation
34
 
15.4
Independent Expert
34

 

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16
Expert Determination
34
 
16.1
Referral to Independent Expert
34
 
16.2
Appointment of Independent Expert
34
 
16.3
Requirements of Independent Expert
35
 
16.4
Rights of the Parties
35
 
16.5
Confidentiality
35
 
16.6
Determination
36
 
16.7
Costs of Independent Expert
36
17
Status of Agreement and further acts
36
18
Relationship between Parties
36
19
Confidentiality and public announcements
37
 
19.1
Confidentiality
37
 
19.2
Conditions
38
 
19.3
Notice to other Parties
39
 
19.4
Indemnities
39
 
19.5
Survival of confidentiality obligations
40
 
19.6
Use of Mining Information in respect to Other Mineral Rights
40
20
Notices
 
40
21
Miscellaneous
41
 
21.1
Governing law
41
 
21.2
Amendments
41
 
21.3
Primacy of this Agreement
41
 
21.4
Language
41
 
21.5
Waiver
41
 
21.6
Consents
42
 
21.7
Counterparts
42
 
21.8
No representation or reliance
42
 
21.9
Expenses
42
 
21.1
Entire agreement
42
 
21.11
Indemnities
43
 
21.12
Severance and enforceability
43
 
21.13
No merger
43
 
21.14
Power of attorney
43
 
21.15
Taxes
43
Annexure A – Additional Permits Area
1
Annexure B – JV Area
2
Annexure C – Additional Permits Area Sublease Agreements
3
Annexure D – JV Sublease Agreements
4

 

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ERG Project Mineral Rights Agreement
 

Date 2014

 
Parties
 
Energizer Resources Inc.
Energizer
141 Adelaide Street, West Suite 520, Toronto, Ontario, Canada
   
Malagasy Minerals Limited
ACN 121 700 105
Malagasy
15 Lovegrove Close, Mount Clarement, Western Australia
   
Madagascar-ERG Joint Venture (Mauritius) Ltd
Company Number: 106367
ERG
6th Floor, Newton Tower, Sir William Newton Street, Port Louis, Republic of
Mauritius

 
Recitals
 
A.  
As at the date of this Agreement, the MGY Subsidiaries are the sole registered
holders of the JV Exploration Permits and the Additional Exploration Permits and
there are presently no JV Exploitation Permits, Additional Exploitation Permits
or ERG Project Exploitation Permits.

 
B.  
Pursuant to a Joint Venture Agreement dated 15 December 2011 between Malagasy,
Energizer and ERG:

 
(i)  
Energizer acquired a 75% interest in the JV Industrial Mineral Rights;

 
(ii)  
ERG was established as the joint venture company for the Joint Venture and
Energizer and Malagasy owned three (3) shares and one (1) share respectively in
ERG;

 
(iii)  
Malagasy, through its subsidiaries, the MGY Subsidiaries, maintains a 100%
interest in the Other Mineral Rights; and

 
(iv)  
ERG, through its 100% subsidiary, MadagascarCo, held the JV Industrial Mineral
Rights for the JV Permits by way of the JV Subleases.

 
C.  
Pursuant to the Sale and Purchase Agreement Energizer has agreed to acquire
Malagasy’s share in ERG.

 
D.  
The Parties agree and acknowledge that at the date of this Agreement, the Mining
Department (the BCMM) is not accepting and/or processing applications for
transfer, registration, amendment or renewal of mining permits or interests in
Madagascar and it is not presently possible to obtain formal recognition of the
renewal, partition, transfer, registration or amendment of the JV Exploration
Permits or the Additional Exploration Permits.

 

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E.  
Pursuant to the Memorandum of Understanding, Malagasy has also agreed, to
effect, through the MGY Subsidiaries, a sublease of the Additional Industrial
Minerals Rights to MadagascarCo and, when possible, a transfer of the ERG
Project Exploration Permits (to the extent they fall within the ERG Project
Area) on the terms of this Agreement.

 
F.  
Pursuant to the Memorandum of Understanding, Malagasy, through its subsidiaries,
the MGY Subsidiaries, has agreed to sell to ERG and ERG has agreed to acquire
the Additional Industrial Mineral Rights on the terms of this Agreement and the
Sale & Purchase Agreement.

 
G.  
The Parties have agreed to enter into this Agreement to record the basis on
which:

 
(i)  
ERG will obtain the Additional Industrial Mineral Rights and hold the ERG
Project Industrial Mineral Rights;

 
(ii)  
Malagasy will hold the Other Mineral Rights;

 
(iii)  
the Parties will co-ordinate their respective Exploration and Mining activities
within the ERG Project Area;

 
(iv)  
the Parties will apply for and obtain the various approvals and authorisations
required to conduct their respective exploration and mining operations on the
ERG Project Area; and

 
(v)  
the Parties will maintain the ERG Project Permits and, when possible, the MGY
Subsidiaries will transfer to ERG’s nominee the ERG Project Exploration Permits
(to the extent they fall within the ERG Project Area).

 
Agreement
 
1.  
Definitions and interpretation

 
1.1  
Definitions

 
In this Agreement, unless the context requires otherwise, the following
expressions will have the following meanings:
 
Accession Deed means a deed between the Parties to this Agreement and a third
party pursuant to which the third party assumes the obligations of the assigning
Party to the extent of the interest being assigned to the third party as if the
third party was an original party to this Agreement and is otherwise in a form
satisfactory to the non-assigning Party, acting reasonably.
 
Additional Exploitation Permits means a permit granted under the Mining Code
within the Additional Permits Area which gives the holder an exclusive right to
exploit authorised minerals, continue exploration and research of such minerals
and to build any permanent or temporary structures.
 

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Additional Exploration Permits means:
 
(a)  
subject to paragraph (b), the exploration permits granted under the Mining Code
listed in Schedule 2; and

 
(b)  
in the event of the grant of a new permit over all or part of any of an
Additional Permit in accordance with clause 4.5(d):

 
(i)  
includes any licence, concession, permit or tenement granted within the ERG
Project Area in relation to the same ground as the relevant Additional
Exploration Permit; and

 
(ii)  
excludes any licence, concession, permit or tenement outside of the ERG Project
Area.

 
Additional Industrial Minerals Rights means the right to explore for and mine
Industrial Minerals within the Additional Permits Area.
 
Additional Permits means:
 
(a)  
the Additional Exploration Permits;

 
(b)  
the Additional Exploitation Permits;

 
(c)  
any licence, concession, permit or tenement which may hereafter be in force or
issued in lieu of or in relation to the same ground as the permits referred to
in paragraphs (a) or (b) of this definition;

 
(d)  
any permit, concession, licence or tenement that is a successor, renewal,
modification, extension or substitute for the permits referred to in paragraphs
(a), (b) or (c) of this definition; and

 
(e)  
all rights to mine and other privileges appurtenant to the mining tenements and
all ore and mineral-bearing material, sand, slimes, tailings and residues of
whatsoever nature located on and under the land the subject of a licence,
concession, permit or tenement referred to in paragraphs (a), (b), (c) or (d) of
this definition,

 
and includes such extensions, renewals, conversions, substitutions,
modifications, amalgamations, subdivisions and variations whether surrendered or
replaced for the Additional Permits.
 
Additional Permits Area means the areas of the Additional Exploration Permits
described in Annexure A and identified by the area highlighted in green in the
map at Schedule 3.
 
Additional Permits Area Subleases has the meaning given to that term in clause
4.3(a).
 
Additional Permits Area Sublease Agreements means the sublease agreements to be
entered into by the Additional Permit Holders and MadagascarCo pursuant to
clause 4.3(c) in relation to the relevant area / squares of each Additional
Permit held by the Additional Permit Holders within the Additional Permits Area,
in the form set out at Annexure C, subject to any reasonable amendments required
as a result of review by the Parties’ Madagascan advisors.
 

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Additional Permit Holders means the holders, at any given time, of the
Additional Permits.
 
Agreement means this agreement, including any amendments made in accordance with
clause 21.2.
 
ASX means the ASX Limited (ACN 008 624 691) trading as the Australian Securities
Exchange.
 
Authority means any government department, local government council, government
or statutory authority or any other party under a Law which has a right to
impose a requirement or whose consent is required with respect to any matter or
thing arising under, or affected by, this Agreement.
 
Business Day means a day other than a Saturday or Sunday on or public holiday in
Ontario, Canada or Perth, Western Australia.
 
Claim means in relation to a Party, any demand, claim, action or proceeding made
or brought by or against the Party, howsoever arising and whether present,
unascertained, immediate, future or contingent.
 
Commencement Date means the date on which all of the conditions in clause 2.1
are satisfied or waived.
 
Completion has the meaning given to it in the Sale and Purchase Agreement.
 
Confidential Information means all information, documents, maps, reports,
records, studies, forms, specifications, processes, statements, formulae, trade
secrets, drawings and other data (and copies and extracts made of or from any
such data) in written or electronic form and whether reduced to writing or not,
and at any time in the possession or under the control of or readily accessible
to any Party, including the Mining Information, concerning:
 
(a)  
the existence or contents of this Agreement;

 
(b)  
ERG Project Industrial Mineral Rights;

 
(c)  
the Other Mineral Rights;

 
(d)  
the ERG Project Permits;

 
(e)  
the operations and transactions of a Party; and

 
(f)  
any other information obtained during the Term of this Agreement,

 
that is not in the public domain (except by failure of a Party to perform and
observe its covenants and obligations under this Agreement) and that has been
obtained by a Party during the negotiations preceding the making of this
Agreement or the Heads of Agreement by or through or by being a Party to this
Agreement or the Heads of Agreement.
 
Decision to Mine has the meaning given in clause 6.1.
 

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Encumbrance means any mortgage, bill of sale, lien, charge, pledge, writ,
warrant, production royalty, caveat (and all claims stated in the caveat),
assignment by way of security, security interest, title retention, preferential
right or trust arrangement, Claim, covenant, profit a pendre, easement, or any
other security arrangement or other right or interest of any third party and
includes any other arrangement having the same effect.
 
Energex means Energex SARL, a company incorporated under the laws of Madagascar
and a wholly owned subsidiary of Malagasy.
 
Environmental Law means any law concerning environmental matters which regulates
or affects the ERG Project Permits, and includes, but is not limited to, laws
concerning land use, development, pollution, waste disposal, toxic and hazardous
substances, conservation of natural or cultural resources and resource
allocation including any law relating to exploration for or development of any
natural resource.
 
Environmental Liability means any obligation, expense, penalty or fine under
Environmental Law, including rehabilitation and rectification work of whatsoever
nature or kind.
 
ERG Project Exploitation Permit means a permit granted under the Mining Code in
relation to the ERG Project Area which gives the holder an exclusive right to
exploit authorised minerals, continue exploration and research of such minerals
and to build any permanent or temporary structures.
 
ERG Project Exploration Permits means all of the Additional Exploration Permits
and the JV Exploration Permits and ERG Project Exploration Permit means any one
of those.
 
ERG Project Industrial Mineral Rights means all Mineral Rights with respect to
Industrial Minerals, including the JV Industrial Mineral Rights and the
Additional Industrial Mineral Rights.
 
ERG Project Permit Holders means the Additional Permit Holders and the JV Permit
Holders.
 
ERG Project Permits means all of the Additional Permits and the JV Permits and
ERG Project Permit means one of those.
 
ERG Project Area means the combined areas of the Additional Permits Area and the
JV Area and identified by the area outlined in red on the map at Schedule 3.
 
Expert means an expert appointed in accordance with clause 16.
 
Exploration all activities and operations that have as their purpose the
discovery, location, delineation and further investigation of any minerals,
mineral deposits and ore, including drilling and trenching, the testing or
proving of those bodies, the conducting of pre-feasibility, viability and
amenability studies and the establishment and the administration of field
offices for the performance of any of these functions.
 
Force Majeure has the meaning given in clause 13.
 

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Good Mining Practices means, in relation to mining, those practices, methods and
acts engaged in or approved by a firm or body corporate which, in the conduct of
its undertaking, exercises that degree of safe and efficient practice,
diligence, prudence, and foresight reasonably and ordinarily exercised by
skilled and experienced operators engaged in the mining industry in Ontario,
Canada.
 
Good Standing means in relation to an ERG Project Permit, that:
 
(a)  
such permit is and remains in full force and effect; and

 
(b)  
such permit:

 
(i)  
is and remains not liable to cancellation, forfeiture or non-renewal; or

 
(i)  
is liable to cancellation, forfeiture or non-renewal where such liability is:

 
(A)  
not a result of the default of the holder of the permit or its subsidiaries;

 
(B)  
solely a result of a compulsory surrender under the Mining Code; or

 
(C)  
solely a result of a Political Event.

 
Governmental Agency means any government or any governmental, semi-governmental,
administrative, fiscal or judicial body, responsible minister, department,
office, commission, delegate, authority, instrumentality, tribunal, board,
agency, entity or organ of government, whether federal, state, territorial or
local, statutory or otherwise, in respect of a sovereign state and includes any
of them purporting to exercise any jurisdiction or power outside that sovereign
state.
 
Green Giant JVA means the document entitled “Green Giant Project Joint Venture
Agreement” between Energizer, ERG and Malagasy dated on or about the date of
this Agreement.
 
IMR Transferee has the meaning given in clause 8.5(a).
 
Industrial Minerals means the minerals listed in Schedule 1.
 
Industrial Minerals Subleases means the Additional Permits Area Subleases and
the JV Subleases and an Industrial Minerals Sublease means any one of them.
 
Industrial Minerals Sublease Agreements means the Additional Permits Area
Sublease Agreements or a JV Sublease Agreements and Industrial Minerals Sublease
Agreement means one such agreement.
 
Joint Venture Agreement means the joint venture agreement dated 15 December 2011
between Malagasy, Energizer and ERG.
 
JV Area means the areas of the JV Exploration Permits described in Annexure B
and identified by the area highlighted in yellow in the map at Schedule 3.
 

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JV Industrial Mineral Rights means the right to explore for and mine Industrial
Minerals within the JV Area in accordance with the JV Permits.
 
JV Exploitation Permits means a permit granted under the Mining Code in relation
to the JV Area which gives the holder an exclusive right to exploit authorised
minerals, continue exploration and research of such minerals and to build any
permanent or temporary structures.
 
JV Exploration Permits means
 
(a)  
subject to paragraph (b), the exploration permits granted under the Mining Code
listed in Schedule 4; and

 
(b)  
in the event of the grant of a new permit over all or part of any of a JV
Permits in accordance with clause 4.5(d):

 
(i)  
includes any licence, concession, permit or tenement granted within the ERG
Project Area in relation to the same ground as the relevant JV Permit; and

 
(ii)  
excludes any licence, concession, permit or tenement outside of the ERG Project
Area.

 
JV Permit Holders means the holders of the JV Permits at any given point in
time.
 
JV Permits means
 
(a)  
the JV Exploration Permits;

 
(b)  
the JV Exploitation Permits;

 
(c)  
any licence, concession, permit or tenement which may hereafter be in force or
issued in lieu of or in relation to the same ground as the permits referred to
in paragraphs (a) or (b) of this definition;

 
(d)  
any permit, concession, licence or tenement that is a successor, renewal,
modification, extension or substitute for the permits referred to in paragraphs
(a), (b) or (c) of this definition; and

 
all rights to mine and other privileges appurtenant to the mining tenements and
all ore and mineral-bearing material, sand, slimes, tailings and residues of
whatsoever nature located on and under the land the subject of a licence,
concession, permit or tenement referred to in paragraphs (a), (b), (c) or (d) of
this definition.
 
JV Subleases means subleases granted by the JV Permit Holders to MadagascarCo
pursuant to clause 10.1 of the Joint Venture Agreement.
 
JV Sublease Agreements means sublease agreements entered into pursuant to the
Joint Venture Agreement between MadagascarCo and one or more of the JV Permit
Holders in relation to the area / squares of each JV Exploration Permit held by
the relevant JV Permit Holder(s) within the JV Area.
 

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Law means any statute, ordinance, code, regulation, law, by-law, local law,
plan, planning scheme, local structure plan, official directive, order,
instrument, undertaking, judicial, administrative or regulatory decree,
judgement, ruling or order.
 
MadagascarCo means the company incorporated under the laws of Madagascar known
as ERG (Madagascar) Ltd.
 
Material Adverse Effect means an unfavourable or adverse event, occurrence or
circumstance, or the result thereof, that causes the actual value of ERG Project
Area or the ERG Project Industrial Mineral Rights to be materially impaired or
devalued but does not include anything that occurs as a result of a Political
Event.
 
Mazoto means Mazoto Minerals SARL, a company incorporated under the laws of
Madagascar and a wholly owned subsidiary of Malagasy.
 
MDA means Mada-Aust SARL, a company incorporated under the laws of Madagascar
and a wholly owned subsidiary of Malagasy.
 
Memorandum of Understanding means the letter of understanding from Energizer to
Mr Peter Langworthy, Non-Executive Director of Malagasy dated 22 October 2013
and signed by Energizer on 24 October 2013 and by Malagasy on 22 October 2013.
 
MGY Subsidiaries means MDA, Mazoto and Energex.
 
Mineral Rights means the right to explore for and mine minerals within the ERG
Project Area in accordance with the ERG Project Permits.
 
Minimum Expenditure Obligations means the minimum expenditure which the holder
of an ERG Project Permit is required under the Mining Code to incur in respect
oof the ERG Project Permit in a given year.
 
Mining means all work of or associated with extraction of mineral deposits by
way of commercial exploitation, including all preparatory development and
incidental work (other than Exploration) and to the extent agreed between the
Parties may include extraction, beneficiation, transportation, refining,
processing and marketing of minerals, including ore concentrates, matte and
metals produced.
 
Mining Area the area of the ERG Project Area reasonably required to conduct
Mining Operations and identified in accordance with clause 6.1(b)(i), including
reasonable sufficient areas for all mining, mining waste dumps, areas required
for treatment facilities, leach pads, tailings dams and/or other associated
infrastructure and may consist of one or more separate parcels of land.
 
Mining Code means the body of legal provisions in force in Madagascar contained
in the Law no 99-022 of 19/08/1999 containing the Mining Code as amended by Law
no 2005-021 of 17/10/2005 as well as Decree no 2006-910 of 19/12/2006 setting
out the conditions of application of the Law no 99-022 of 19/08/1999 as amended
by Law no 2005-021 of 17/10/2005, as amended from time to time.
 
Mining Department means the Bureau du Cadastre Minier de Madagascar (the
Madagascar Mining Registry Office), also known as the BCMM.
 

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Mining Information means all technical information including (without
limitation) geological, geochemical and geophysical reports, surveys, mosaics,
aerial photographs, samples, drill cores, drill logs, drill pulp, assay results,
maps and plans relating to the Industrial Minerals in the ERG Project Area,
whether in physical, written or electronic form.
 
Mining Operations means commercial mining operations and all activities
necessary, expedient, conducive or incidental to the commercial mining
operations including without limitation:
 
(a)  
mine development; and

 
(b)  
as applicable:

 
(i)  
in the case of Malagasy, the weighing, sampling, assaying, mining, extraction,
crushing, refining, treatment, transportation, handling, storage, loading and
delivery of Other Minerals; and

 
(ii)  
in the case of ERG, the weighing, sampling, assaying, mining, extraction,
crushing, refining, treatment, transportation, handling, storage, loading and
delivery of Industrial Minerals.

 
Other Minerals means all minerals other than Industrial Minerals.
 
Other Mineral Rights means all Mineral Rights other than the ERG Project
Industrial Mineral Rights.
 
Other Minerals Sublease has the meaning given in clause 4.7(a).
 
Other Minerals Sublease Agreements means sublease agreements entered into
pursuant to clause 4.7 between Malagasy and MadagascarCo in relation to the area
/ squares of each of the ERG Project Permits held by MadagascarCo within the ERG
Project Area, in the form set out in Annexure D, subject to any reasonable
amendments required as a result of review by the Parties’ Madagascan advisors.
 
Outgoings means all rents, rates, survey fees and other fees and charges under
the applicable legislation or otherwise in connection with an ERG Project
Permit.
 
Party means a party to this Agreement and Parties means the parties to this
Agreement.
 
Permit Holders means at any given point in time, the persons who are the
registered owners of the ERG Project Permits as registered with the Mining
Department.
 
Political Event means any act, event or cause which is beyond the reasonable
control of the Party concerned (other than lack of or inability to use funds)
resulting from the action or inaction of any Governmental Agency including
expropriation, restraint, prohibition, intervention, requisition, requirement,
direction or embargo by legislation, regulation or other legally enforceable
order.
 

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Related Body Corporate in relation to a Party, a corporation that is:
 
(a)  
a holding company of the Party;

 
(b)  
a subsidiary of the Party; or

 
(c)  
a subsidiary of a holding company of the Party.

 
Sale and Purchase Agreement means document entitled “Sale and Purchase
Agreement” between ERG, Energizer and Malagasy executed on about the date of
this Agreement.
 
SIAC means the Singapore International Arbitration Centre.
 
Sublease means an Industrial Minerals Sublease or a Other Minerals Sublease.
 
Sublease Agreements means an Industrial Minerals Sublease Agreement or an Other
Minerals Sublease Agreement.
 
Sublessee means the party which has been granted the relevant Sublease.
 
Term has the meaning set out in clause 2.
 
TSX means the Toronto Stock Exchange.
 
1.2  
Interpretation

 
(a)  
headings are for convenience; and

 
unless the context indicates otherwise:
 
(b)  
an obligation or a liability assumed by, or a right conferred on, 2 or more
persons binds or benefits them jointly and severally;

 
(c)  
a word or phrase in the singular number includes the plural, a word or phrase in
the plural number includes the singular, and a word indicating a gender includes
every other gender;

 
(d)  
if a word or phrase is given a defined meaning, any other part of speech or
grammatical form of that word or phrase has a corresponding meaning;

 
(e)  
a reference to:

 
(i)  
a party, clause, schedule, exhibit, attachment or annexure is a reference to a
party, clause, schedule, exhibit, attachment or annexure to or of this
Agreement;

 
(ii)  
a party includes that party’s executors, administrators, successors, permitted
assigns, including persons taking by way of novation and, in the case of a
trustee, includes a substituted or an additional trustee;

 
(iii)  
an agreement includes any undertaking, deed, agreement and legally enforceable
arrangement whether in writing or not, and is to that agreement as varied,
novated, ratified or replaced from time to time;

 
(iv)  
a document includes an agreement in writing and any deed, certificate, notice,
instrument or document of any kind;

 

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(v)  
a document in writing includes a document recorded by any electronic, magnetic,
photographic or other medium by which information may be stored or reproduced;

 
(vi)  
a document (including this Agreement) includes a reference to all schedules,
exhibits, attachments and annexures to it, and is to that document as varied,
novated, ratified or replaced from time to time;

 
(vii)  
legislation or to a provision of legislation includes any consolidation,
amendment, re-enactment, substitute or replacement of or for it, and refers also
to any regulation or statutory instrument issued or delegated legislation made
under it;

 
(viii)  
a person includes an individual, the estate of an individual, a corporation, an
authority, an unincorporated body, an association or joint venture (whether
incorporated or unincorporated), a partnership and a trust;

 
(ix)  
a right includes a power, remedy, authority, discretion or benefit;

 
(x)  
conduct includes an omission, statement or undertaking, whether in writing or
not;

 
(xi)  
an agreement, representation or warranty in favour of two or more persons is for
the benefit of them jointly and severally; and

 
(xii)  
an agreement, representation or warranty on the part of two or more persons
binds them jointly and severally;

 
(f)  
the word “includes” in any form is not a word of limitation;

 
(g)  
the words “for example” or “such as” when introducing an example do not limit
the meaning of the words to which the example relates to that example or to
examples of a similar kind;

 
(h)  
a reference to a day is to a period of time commencing at midnight and ending 24
hours later;

 
(i)  
if a period of time dates from a given day or the day of an act or event, it is
to be calculated exclusive of that day; and

 
(j)  
a reference to “C$”, “$” or “dollar” is to US currency.

 
2.  
Conditions

 
2.1  
Conditions precedent

 
This Agreement is subject to and conditional upon:
 
(a)  
the execution of the Sale and Purchase Agreement;

 
(b)  
the execution of the Green Giant JVA;

 

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(c)  
Completion pursuant to the Sale and Purchase Agreement; and

 
(d)  
the Parties having obtained all shareholder and regulatory approvals necessary
to achieve Completion and give effect to this Agreement including:

 
(i)  
TSX approvals;

 
(ii)  
ASX approvals; and

 
(iii)  
all necessary approvals under the relevant laws of Ontario, Canada, the United
States of America and Australia.

 
2.2  
Waiver of Conditions precedent

 
The conditions in clause 2.1 are included for the benefit of both Parties and
may only be waived by mutual agreement of the Parties.
 
2.3  
Non-satisfaction of Conditions

 
In the event that the condition in clause 2.1 is not satisfied within 60 days
following the date of this Agreement or such later date as the Parties may agree
in writing, then either Party may terminate this Agreement by giving written
notice to the other Party to that effect.
 
3.  
Term

 
This Agreement commences on the Commencement Date and terminates on the earlier
of:
 
(a)  
a single Party becoming the holder of all of the Mineral Rights, namely all of
the ERG Project Industrial Mineral Rights and all of the Other Mineral Rights;
and

 
(b)  
the expiry or other termination of the last of the ERG Project Permits,

 
(Term).
 
4. 
Rights to explore and sublease

 
4.1
Grant of Additional Industrial Mineral Rights

 
Upon Completion:
 
(a)  
the Additional Permit Holders will be deemed to have granted the Additional
Industrial Mineral Rights to ERG for consideration which includes the benefit of
Exploration activities undertaken at the cost of ERG and MadagascarCo; and

 
(b)  
Malagasy must procure that the Additional Permit Holders do all things required
pursuant to this Agreement or otherwise necessary to effect the grant of the
Additional Industrial Mineral Rights to ERG.

 

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4.2  
Minerals Rights interests at Completion

 
On and from Completion, the respective Mineral Rights interests of the Parties
within the ERG Project Area will be:
 
Party
ERG Project Industrial Mineral Rights
Other Mineral Rights
ERG (to be a wholly owned subsidiary of Energizer
100%
0%
MGY Subsidiaries
0%
100%

 
4.3  
Grant of Additional Permits Area Subleases

 
(a)  
Upon Completion, Malagasy will procure that the Additional Permit Holders
promptly grant to MadagascarCo, or its Related Bodies Corporate, subleases in
respect of the Additional Industrial Mineral Rights over the Additional Permits
Area on terms whereby, for consideration which includes the benefit of
Exploration activities undertaken at the cost of ERG and MadagascarCo:

 
(i)  
MadagascarCo will, in accordance with the Mining Code, be the sole holder of the
Industrial Mineral Rights and have the exclusive right to conduct Exploration
and Mining for Industrial Minerals within the Additional Permits Area; and

 
(ii)  
the Additional Permits Holders will, in accordance with and as permitted under
the Mining Code, retain the exclusive right to Other Mineral Rights,

 
(each an Additional Permits Area Sublease).
 
(b)  
Subject to the Mining Code, the Additional Permits Area Subleases will be for
the term of the Additional Permits, including for the term of any renewal of the
Additional Permits.

 
(c)  
Subject to clause 4.3(d), the Additional Permit Holders must enter into the
Additional Permits Area Sublease Agreements and any other agreement(s) required
by the Mining Code with MadagascarCo to give effect to the right to carry out
Exploration and Mining as described in clause 4.3(a) and the Additional Permits
Area Subleases.

 
(d)  
The Parties must use all reasonable endeavours to ensure the Additional Permits
Area Sublease Agreements and any other agreement contemplated by clause 4.3 are
entered into by the Additional Permit Holder and MadagascarCo on, or as soon as
possible after, the Completion.

 

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4.4  
Continuation of JV Subleases and JV Industrial Mineral Rights

 
The Parties acknowledge and agree that, subject to clause 4.6, the JV Industrial
Mineral Rights, the JV Subleases and the JV Subleases Agreements continue after
the termination of the Joint Venture Agreement at Completion on the terms of
this Agreement and the JV Sublease Agreements.
 
4.5  
Transfer of ERG Project Permits

 
The Parties agree and acknowledge that upon either Party being notified by the
Mining Department or otherwise becoming aware that that the Mining Department
will from that time permit formal transfer and registration of interests in,
transfers of and dealings in the ERG Project Permits, that Party must notify the
other Party and following such notification:
 
(a)  
subject to clause 4.5(e), Malagasy must promptly deliver, or must cause the ERG
Project Permit Holders to promptly deliver, to ERG signed instruments of
transfer in registrable form for the ERG Project Permits (or part thereof in
accordance with clause 4.5(d) below) naming MadagascarCo or such other entity as
nominated by ERG, as the transferee;

 
(b)  
ERG must promptly lodge, or must cause MadagascarCo to promptly lodge executed
transfers in registrable form for the ERG Project Permits (or part thereof in
accordance with clause 4.5(d) below) with the Mining Department or any Authority
which has the right to approve or register exploration and mining permits in
Madagascar in accordance with the laws of Madagascar;

 
(c)  
in the event that Mining Department accepts the registration of the transfers,
Malagasy will retain the Other Mineral Rights and the exclusive right to carry
out Exploration and Mining for Other Minerals within the ERG Project Area, in
accordance with the laws of Madagascar, for the purposes of identifying and
exploiting any Other Minerals within that area;

 
(d)  
subject to clause 4.5(e), to the extent that one or more squares (carres) of an
ERG Project Permit fall outside of the ERG Project Area, in lieu of transfer of
the whole ERG Project Permit to MadagascarCo in accordance with clause 4.5(a):

 
(i)  
Malagasy must use its best endeavours to promptly:

 
(A)  
deliver to ERG, or must cause the ERG Project Permit Holders to promptly
deliver, signed instruments of transfer in registrable form for the transfer of
a permit, covering only the squares (carres) of the ERG Project Permit which
fall within the ERG Project Area, to MadagascarCo; or

 
(B)  
apply for, and obtain from, the Mining Department the grant of a new permit
covering only the squares (carres) of the ERG Project Permit which fall within
the ERG Project Area and upon the grant of such new permit promptly deliver to
ERG, or must cause the holders of the new permit to promptly deliver, signed
instruments of transfer in registrable form for the transfer of the new permit
to MadagascarCo; and

 
(ii)  
until such a replacement permit is transferred to MadagascarCo, the Additional
Permits Area Sublease or JV Sublease (as applicable) which applies to that area
shall remain in force, unless otherwise agreed in writing by the Parties;

 

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(e)  
irrespective of the obligations described in this clause 4.5, if a Party is
required to do anything in relation to this clause 4.5 which could foreseeably
result in any cancellation, forfeiture or suspension of the whole or any part of
an ERG Project Permit, then:

 
(i)  
the Parties must consult with one another and in good faith agree to either:

 
(A)  
proceed with the action; or

 
(B)  
refrain from that action and undertake such alternative actions as agreed by the
Parties in order to transfer the relevant rights and interests in the ERG
Project Area to ERG; and

 
(ii)  
a Party must not proceed with any action that is wholly within its control and
could foreseeably result in any cancellation, forfeiture or suspension of the
whole or any part of an ERG Project Permit without the other Parties’ consent ;
and

 
(f)  
if segregation under clause 4.5(d) is temporarily unable to occur due to matters
outside of the control of the Permit Holders and the Parties, or the Parties
agree not proceed with any transfer or segregation under clause 4.5(e), then the
Parties and the Permit Holders agree;

 
(i)  
that the Sublease Agreements in respect of the relevant ERG Project Permit shall
remain in place to ensure that ERG has its full interest and benefit in the ERG
Project Area;

 
(ii)  
to implement all reasonable arrangements (whether set out in paragraph (d) or
otherwise) to achieve a transfer or grant of the relevant legal interest in the
ERG Project Area to ERG as soon as reasonably possible; and

 
(iii)  
until a transfer is effected in accordance with paragraph (ii), Malagays’s
obligations under this Agreement as ERG Project Permit Holder shall continue in
respect of the relevant ERG Project Permits.

 
4.6  
Termination of Industrial Minerals Subleases

 
Upon the successful transfer and registration of each of the ERG Project
Exploration Permits to MadagascarCo pursuant to clause 4.5:
 
(a)  
the parties will do all things necessary to promptly terminate the Industrial
Minerals Subleases to which the transferred ERG Project Permit (or part thereof)
relates including the termination of the Industrial Minerals Sublease
Agreements; and

 
(b)  
each Party acknowledges and agrees that:

 

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(i)  
it shall have no rights whatsoever against the other Parties for any payment or
Claim arising under or in connection with an Industrial Minerals Sublease which
is terminated in accordance with clause 4.6(a) above; and

 
(ii)  
it unconditionally releases and forever discharges each of the other Parties
from any Claims they may now have or but for this Agreement at any time in the
future may have had directly or indirectly against the other Parties arising
under or in connection with an Industrial Minerals Subleases which is terminated
in accordance with clause 4.6(a) above, whether such Claims are known, unknown
or incapable of being known at the time of execution of this Agreement.

 
4.7  
Grant of Other Minerals Subleases

 
(a)  
Upon the successful transfer and registration of an ERG Project Permit to
MadagascarCo, ERG will procure that MadagascarCo grants to Malagasy, or its
Related Bodies Corporate, a sublease in respect of Other Mineral Rights within
the area of the relevant ERG Project Permit other than the ERG Project
Industrial Mineral Rights, on terms whereby, for consideration which includes
the benefit of Exploration activities undertaken at the cost of Malagasy:

 
(i)  
Malagasy will, in accordance with the Mining Code, be the sole holder of all
Other Mineral Rights within the area of the relevant ERG Project Permit other
than the ERG Project Industrial Mineral Rights, and will have the exclusive
right to conduct Exploration and Mining for all minerals within the area of the
relevant ERG Project Permit, other than Industrial Minerals within the ERG
Project Area; and

 
(ii)  
ERG will, in accordance with and as permitted under the Mining Code, retain the
exclusive right to ERG Project Industrial Mineral Rights,

 
(each an Other Minerals Sublease).
 
(b)  
Subject to the Mining Code, the Other Minerals Subleases will be for the term of
the ERG Project Permits, including for the term of any renewal of the ERG
Project Permits.

 
(c)  
Subject to clause 4.7(d), MadagascarCo must enter into the Other Minerals
Sublease Agreements and any other agreement(s) required by the Mining Code with
Malagasy or its Related Body Corporate to give effect to the right to carry out
Exploration and Mining as described in clause 4.7(a) and the Other Minerals
Subleases.

 
(d)  
The Parties must use all reasonable endeavours to ensure the Other Minerals
Sublease Agreements and any other agreement contemplated by clause 4.7 are
entered into by Malagasy and MadagascarCo on, or as soon as possible after,
Completion.

 
4.8  
Covenants of Permit Holders in respect of the ERG Project Exploration Permits

 
The Permit Holders must at all times during the Term:
 
(a)  
use all reasonable endeavours permitted under the laws of Madagascar to ensure
the ERG Project Permits are renewed in the usual course for such periods as
permitted by the Mining Code, as requested by the Sublessee;

 

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(b)  
do all such acts as are reasonably necessary to keep the ERG Project Permits in
Good Standing under the Mining Code which can only be done or performed by the
registered holder of the ERG Project Permits, provided that the Permit Holder
must give the Sublessee adequate prior notice of all such acts;

 
(c)  
use all reasonable endeavours to have the Sublease Agreements registered with
the Mining Department as soon as possible (provided in this case, the costs
associated with registration of the Sublease Agreements with the Mining
Department will be met 50% by the Permit Holders and 50% by the Sublessee); and

 
(d)  
apply to the Mining Department to add such minerals to the ERG Project Permits
as may be requested by Malagasy or ERG from time to time to the extent those
minerals are not already noted on the ERG Project Permits.

 
4.9  
Covenants in respect of the ERG Project Exploration Permits

 
(a)  
Subject to clauses 4.8 and 4.11, during the Term, ERG and MadagascarCo must

 
(i)  
do all such acts and make all such payments as are reasonably necessary to keep
the ERG Project Permits in Good Standing under the Mining Code;

 
(ii)  
comply with all Minimum Expenditure Obligations in respect of the ERG Project
Permits (if any),

 
provided that, for the period that Malagasy or the MGY Subsidiaries are the
Permit Holder, they shall:
 
(iii)  
execute such documents and give to ERG or MadagascarCo such assistance as they
may reasonably require to maintain the ERG Project Permits and to keep the ERG
Project Permits in Good Standing under the Mining Code; and

 
(iv)  
where reasonably required by ERG and MadagascarCo, make application for and use
their best endeavours to obtain renewals of the ERG Project Permits or
conversion of the ERG Project Permits into new mining titles under the Mining
Code, as required by ERG and MadagascarCo.

 
(b)  
During the Term, ERG and Malagasy must contribute as equal contributors to all
Outgoings.

 
(c)  
During the Term, the Permit Holders must supply to the Sublessee, and any person
who has the Sublessee’s written authority, any information or document in its
possession or control reasonably requested concerning the ERG Project
Exploration Permits.

 

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4.10  
Remedies of Sublessee

 
(a)  
If any Permit Holder does, permits or suffers to be done anything, or omits to
do anything required under the Mining Code or other laws of Madagascar, which
constitutes a breach of any of its covenants under this Agreement and which may,
in the Sublessee’s reasonable opinion, result in:

 
(i)  
the termination or non-renewal of an ERG Project Permit;

 
(ii)  
a revocation of any permit, authority or approval necessary to maintain the Good
Standing of an ERG Project Permit under the Mining Code; or

 
(iii)  
loss of access to any part of the ERG Project Area,

 
the Sublessee has the right, on each occurrence, to be appointed the Permit
Holder’s attorney for the purpose of taking whatever remedial steps it considers
necessary to remedy the breach.
 
(b)  
Any costs incurred by the Sublessee in exercising its rights pursuant to clause
4.10(a) will be a debt due from the Permit Holders to the Sublessee payable upon
demand.

 
(c)  
The right created by clause 4.10(a) are the sole remedy in respect of a breach
to which clause 4.10(a) applies.

 
(d)  
The Sublessee will not be liable to the Permit Holders for any loss or damage
suffered by the Permit Holders as a result of actions taken or omissions made by
Sublessee in the course of exercising or purporting to exercise its rights under
clause 4.10(a) so long as the Sublessee has acted in good faith.

 
4.11  
Exercise of mineral rights

 
ERG must, and must procure that MadagascarCo will, in the exercise of the ERG
Project Industrial Mineral Rights, and Malagasy and its Related Bodies Corporate
must, in the exercise of the Other Mineral Rights:
 
(a)  
comply with the conditions of the ERG Project Permits (to the extent that those
conditions relate to the ERG Project Area) as if that party were the permit
holder;

 
(b)  
comply with the requirements of the Mining Department, the Mining Code,
Environmental Laws and any other laws dealing with miners and the exploration
for and mining of minerals;

 
(c)  
be solely responsible for any Environmental Liability arising from the exercise
of the ERG Project Industrial Mineral Rights in the case of ERG and
MadagascarCo, and the exercise of the Other Mineral Rights in the case of
Malagasy;

 
(d)  
be responsible for approvals required for activities on the ERG Project Area,
provided that the Permit Holder shall give such assistance as is reasonably
necessary to apply for such approvals;

 

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(e)  
be responsible for the preparation and lodgement of any reporting obligations on
any work done on, and money expended in connection with the ERG Project Area,
provided that the Permit Holder shall give such assistance as is reasonably
necessary to prepare such reports;

 
(f)  
comply with, adopt and exercise Good Mining Practices including rehabilitating
any ground disturbance;

 
(g)  
without prejudice to clause 8, use its reasonable endeavours to minimise
interference with the other Parties’ activities in planning, programming and
executing any exploration activity on the ERG Project Exploration Permits;

 
(h)  
keep all drill holes, costeans, trenches, excavations, shafts and other workings
secure and safe and properly maintained and, where necessary, fenced; and

 
(i)  
not do or suffer to be done anything which will or may place in jeopardy the ERG
Project Permits or render any of them liable to forfeiture.

 
4.12  
Notice of activities

 
(a)  
Each Party must, at least 20 Business Days prior to commencing any program of
activity on the ERG Project Area (Proposed Activity), give a notice to the other
(Notice of Proposed Activity) containing particulars of:

 
(i)  
the general nature of the Proposed Activity; and

 
(ii)  
the areas of the ERG Project Area which the Party proposes to enter upon to
conduct the Proposed Activity and or to construct, operate and maintain
infrastructure in relation to the Proposed Activity.

 
(b)  
The Sublessee will, at the cost of the Permit Holders or a Related Body
Corporate of the Permit Holders, assay any exploration results for any minerals
within the ERG Project Area requested by the Permit Holders provided that such
request is received within 20 Business Days after receipt of a Notice of
Proposed Activity.

 
(c)  
The Permit Holders or a Related Body Corporate of the Permit Holders will, at
the cost of the Sublessee, assay any exploration results for any minerals within
the ERG Project Area requested by the Sublessee provided that such request is
received within 20-Business Days after receipt of a Notice of Proposed Activity.

 
(d)  
Each Party must provide to the other Party the results of the Party’s activities
on the ERG Project Area by way of:

 
(i)  
quarterly reports; and

 
(ii)  
reports at such other times as is required by the Permit Holders or a Related
Body Corporate of the Permit Holders to enable the Permit Holders to comply with
statutory and Mining Departmental reporting obligations as the holders of the
ERG Project Exploration Permits.

 

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4.13  
Mutual indemnities

 
(a)  
Energizer and ERG each jointly and severally agree to indemnify, and keep
indemnified, and hold harmless Malagasy and its Related Bodies Corporate,
directors, employees and consultants from and against all Claims that may be
made, brought against, suffered, sustained or incurred by Malagasy, the MGY
Subsidiaries or any of their Related Bodies Corporate, arising out of any act or
omission (including any negligent act or omission) of Energizer or ERG and in
the course of the exercise of activities undertaken by Energizer or ERG on the
ERG Project Area.

 
(b)  
Malagasy agrees to indemnify, and keep indemnified, and hold harmless Energizer
and ERG and each of their Related Bodies Corporate, directors, employees and
consultants from and against all Claims that may be made, brought against,
suffered, sustained or incurred by ERG and MadagascarCo or any of their Related
Bodies Corporate, arising out of any act or omission (including any negligent
act or omission) of Malagasy or the MGY Subsidiaries and in the course of the
exercise of activities undertaken by Malagasy or the MGY Subsidiaries on the ERG
Project Area or in relation to the ERG Project Permits.

 
5.  
Transfer of Permits

 
(a)  
Subject to clause 5(b), should the Permit Holders decide to Dispose of their
interest in any of the ERG Project Permits, they may only sell, transfer or
otherwise dispose of that interest to any person (Permit Transferee):

 
(i)  
provided the Sublessee is given the opportunity to match any bona fide third
party offer as a right of first refusal for a period of 30 days from the time of
notice of the offer from the Permit Holders; and

 
(ii)  
the Permit Transferee enters into an Accession Deed.

 
(b)  
The Permit Holders may transfer the ERG Project Permits to each other or a
Related Body Corporate of the Permit Holders provided that the transferee first
enters into an Accession Deed.

 
6.  
Mining Operations

 
6.1  
Decision to Mine

 
(a)  
Either Party may at any time and at its sole discretion decide to commence
Mining Operations in respect of Industrial Minerals or Other Minerals (as
applicable) within all or part of the ERG Project Area (Decision to Mine).

 
(b)  
Upon making a Decision to Mine in accordance with clause 6.1(a), the party who
made the Decision to Mine (Mining Party) must promptly:

 
(i)  
give notice to the other Party (Non-Mining Party) and the Permit Holders of the
Decision to Mine including identifying the boundaries of the Mining Area which
is appropriate to encompass all deposits of Industrial Minerals or Other
Minerals (as applicable) which are to be included in the Mining Operations,
together with any milling or concentrating plant and other appropriate
infrastructure and facilities necessary for the efficient conduct of the Mining
Operations; and

 

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(ii)  
instruct the Permit Holders to apply for, as the case may be, any authorisation
or permission required under the Mining Code or other laws of Madagascar,
including the conversion of Exploration Permits into Exploitation Permits and
relevant environmental authorisations, the granting of which by the Mining
Department or other Governmental Agency of Madagascar is a condition to the
implementation of the Decision to Mine.

 
6.2  
Transfer of Mining Area

 
As soon as practicable after determination of the Decision to Mine:
 
(a)  
the Permit Holders and the Mining Party must co-operate to prepare, execute and
procure registration of such conditional surrenders, applications, transfers,
new sub-leases and other documents as may be necessary to segregate the Mining
Area and to vest such area in the Mining Party; but

 
(b)  
if the Mining Party decides to delay segregation, or segregation cannot
immediately occur due to matters outside of the control of the Permit Holders or
the Mining Party, then the Parties and the Permit Holders will implement all
such reasonable alternative arrangements in order for the Mining Party to have
the sole benefit and control of the Mining Area.

 
6.3  
Conversion to Exploitation Permits

 
The Parties acknowledge and agree that:
 
(a)  
in order to commence Mining Operations in respect of all or a part of the ERG
Project Area, the ERG Project Exploration Permits, to the extent they cover the
Mining Area (Current Permits) will be converted into ERG Project Exploitation
Permits; and

 
(b)  
upon either Party making a Decision to Mine, the Parties must do all things
necessary to, as promptly as possible, have the Current Permits converted into
ERG Project Exploitation Permits and to apply for all relevant environmental
authorisations.

 
6.4  
Transfer of Exploitation Permits

 
(a)  
Any ERG Project Exploitation Permit issued by the Mining Department to the
Permit Holders, except where the Mining Party or its Related Body Corporate is
the sole Permit Holder, must be immediately transferred or, if for whatever
reason the ERG Project Exploitation Permit cannot immediately be transferred,
sub-leased (as applicable) by the Permit Holders to the Mining Party as soon as
possible after the grant of the ERG Project Exploitation Permit.

 

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(b)  
The Parties acknowledge and agree that, in relation to this clause 6, it is the
preference of the Parties to have any ERG Project Exploitation Permit issued by
the Mining Department to a Permit Holder other than the Mining Party or its
Related Body Corporate, immediately transferred to the Mining Party. However if
such a transfer is not possible for whatever reason, then the Parties will
implement such alternative arrangements in order for the Mining Party to have
the sole benefit and control of the ERG Project Exploitation Permit including
entering into new sub-leases in respect of the ERG Project Exploitation Permits
on terms and conditions which are consistent with this Agreement.

 
(c)  
The Parties acknowledge and agree that on transfer of the ERG Project
Exploitation Permits to the Mining Party, the Mining Party will grant a
sub-lease to the Non-Mining Party or its nominee in respect to the Industrial
Mineral Rights or Other Mineral Rights (as applicable) within the ERG Project
Exploitation Permit on terms and conditions which are consistent with this
Agreement, including clause 4.

 
6.5  
Holding of Exploitation Permits

 
During the time between the granting of an ERG Project Exploitation Permit and
the formal transfer or sub-lease of the ERG Project Exploitation Permit to the
Mining Party, the Permit Holders shall hold the ERG Project Exploitation Permits
for the Mining Party’s sole benefit and agree:
 
(a)  
not to act in any manner or do anything which is detrimental to the Mining Party
or the ERG Project Exploitation Permits; and

 
(b)  
to act in accordance with the Mining Party’s reasonable instructions in relation
to the ERG Project Exploitation Permits provided these instructions are not
contrary to or in breach of the laws of Madagascar.

 
6.6  
Approval of Mining Department

 
The Permit Holders must promptly apply for the approval of the Mining Department
or other relevant body for the transfer or sub-lease (as applicable) of any ERG
Project Exploitation Permit issued to the Permit Holders in accordance with
clause 6.4 and to do all other things reasonably necessary to effect the
transfer or sub-lease of the granted ERG Project Exploitation Permits to the
Mining Party as soon as possible after the grant of the ERG Project Exploitation
Permit.
 
6.7  
Option of Permit Holders to transfer Exploration Permits prior to conversion

 
The Permit Holders may fulfil their obligations under this clause 6 by
transferring the Current Permits or the ERG Project Exploration Permits of which
the Current Permits form part, to the Mining Party before any ERG Project
Exploitation Permit is issued, subject to compliance with all applicable laws
and conditions of grant of the relevant ERG Project Permits.
 
6.8  
Avoidance of forfeiture of Tenements

 
(a)  
If a Party is required to do anything in relation to this clause 6 which could
foreseeably result in any cancellation, forfeiture or suspension of the whole or
any part of an ERG Project Permit, then:

 

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(i)  
the Parties must consult with one another and in good faith agree to either:

 
(A)  
proceed with the action; or

 
(B)  
refrain from that action and undertake such alternative actions as agreed by the
Parties in order to transfer the relevant rights and interests in the ERG
Project Area to ERG; and

 
(ii)  
a Party must not proceed with any action that is wholly within its control and
could foreseeably result in any cancellation, forfeiture or suspension of the
whole or any part of an ERG Project Permit without the other Parties’ consent ;
and

 
(b)  
if segregation or transfer under this clause 6 is temporarily unable to occur
due to matters outside of the control of the Permit Holders and the Parties, or
the Parties agree not proceed with any transfer or segregation under clause
6.8(a), then the Parties and the Permit Holders agree;

 
(i)  
that the Sublease Agreements in respect of the relevant ERG Project Permit shall
remain in place to ensure that ERG has its full interest and benefit in the ERG
Project Area;

 
(ii)  
to implement all reasonable arrangements (whether set out in this clause 6 or
otherwise) to achieve a transfer or grant of the relevant legal interest in the
ERG Project Area to ERG as soon as reasonably possible; and

 
(iii)  
until a transfer is effected in accordance with paragraph 4.5(f)(ii), Malagasy’s
obligations under this Agreement as ERG Project Permit Holder shall continue in
respect of the relevant ERG Project Permits.

 
7.  
Environment and Mining Operations

 
Prior to undertaking any Mining Operations within the ERG Project Area, the
Parties must use all reasonable endeavours to ensure the Mining Party obtains
all relevant environmental approvals necessary under Madagascan law, including
the approval of the environmental commitment plan (plan d’engagement
environnemental) and of the environmental impact study (Etude d’impact
environmental) and the issuance of an environmental authorisation related to the
proposed Mining Operations.
 
8.  
Other Mineral Rights

 
8.1  
Holder of Other Mineral Rights

 
The Parties agree and acknowledge that the MGY Subsidiaries are:
 
(a)  
the sole holders of the Other Mineral Rights; and

 
(b)  
no other party has any rights in the ERG Project Permits other than as
contemplated by this Agreement.

 

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8.2  
Priority of exercise of ERG Project Industrial Mineral Rights

 
Subject to clause 8.3, Malagasy and ERG must consult, co-operate and otherwise
use all reasonable endeavours not to interfere with:
 
(a)  
the exercise of the ERG Project Industrial Mineral Rights by ERG; and

 
(b)  
the exercise of the Other Mineral Rights by the Malagasy,

 
but to the extent such interference cannot reasonably be avoided, the exercise
of the ERG Project Industrial Mineral Rights by ERG will have priority. Without
limiting the foregoing, Malagasy, as the holder of the Other Mineral Rights, and
ERG must, prior to the commencement of their respective seasonal exploration
programmes on the ERG Project Area, consult with each other as to the contents
of those programs and use reasonable endeavours to ensure those programs are not
incompatible.
 
8.3  
Suspension of Other Mineral Rights for duration of Mining Operations

 
Subject to clause 8.6, upon ERG making a Decision to Mine, the Other Mineral
Rights of Malagasy will be suspended over the Mining Area from the commencement
and for the duration of the Mining Operations the subject of that Decision to
Mine.
 
8.4  
Transfer of Other Mineral Rights

 
Malagasy may transfer, assign or otherwise dispose of the whole or any part of
the Other Mineral Rights to any person (OMR Transferee) subject to:
 
(a)  
Malagasy giving ERG the opportunity to match any bona fide third party offer for
the Other Mineral Rights as a right of first refusal for a period of 30 days
from the time of notice of the offer from Malagasy;

 
(b)  
the OMR Transferee being technically and financially able to perform the
obligations of Malagasy as the holder of the Other Mineral Rights under this
Agreement to the extent of the interest disposed of; and

 
(c)  
the OMR Transferee entering into a deed with ERG whereby the OMR Transferee
agrees to be bound by, and assumes the obligations of Malagasy as the holder of
the Other Mineral Rights under this Agreement (including the obligations under
this clause) to the extent of the interest to be disposed of.

 
If the OMR Transferee is a person that has technical and financial abilities
(insofar as such abilities are relevant to the performance of the obligations of
the holder of the Other Mineral Rights under this Agreement) that are equivalent
or greater to those of Malagasy as at the Commencement Date, then the
requirements of clause 8.4(b) shall be deemed to be satisfied.
 
8.5  
Transfer of ERG Project Industrial Mineral Rights

 
(a)  
ERG may transfer, assign or otherwise dispose of the whole or any part of the
ERG Project Industrial Mineral Rights to any person (IMR Transferee) subject to:

 

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(i)  
ERG giving Malagasy the opportunity to match any bona fide third party offer for
the ERG Project Industrial Mineral Rights as a right of first refusal for a
period of 30 days from the time of notice of the offer from ERG;

 
(ii)  
the IMR Transferee being technically and financially able to perform the
obligations of ERG and MadagascarCo under this Agreement to the extent of the
interest disposed of; and

 
(iii)  
the IMR Transferee entering into a deed with Malagasy whereby the IMR Transferee
agrees to be bound by, and assumes the obligations of ERG and MadagascarCo under
this Agreement (including the obligations under this clause) to the extent of
the interest to be disposed of.

 
(b)  
If the IMR Transferee is a person that has technical and financial abilities
(insofar as such abilities are relevant to the performance of the obligations of
the holder of the ERG Project Industrial Mineral Rights under this Agreement)
that are equivalent or greater to those of Energizer and ERG as at the
Commencement Date, then the requirements of clause 8.5(a)(ii) shall be deemed to
be satisfied.

 
8.6  
Co-mingling

 
(a)  
If a deposit of Industrial Minerals is co-mingled with or co-incident to a
deposit of Other Minerals then ERG and Malagasy will negotiate in good faith the
terms on which they will jointly develop the Industrial Minerals and Other
Minerals, provided that, subject to clause 8.6(b), in no circumstances will the
exploration or development of a deposit of Other Minerals impede the exploration
or development of a deposit of Industrial Minerals.

 
(b)  
The development of a deposit of Other Minerals that is co-mingled or co-incident
to a deposit of Industrial Minerals will prevail over the exploration or
development of the deposit of Industrial Minerals only in following
circumstances:

 
(i)  
the deposit of Other Minerals has been determined by a competent person to be an
orebody comprising Measured Resource or Ore Reserve with a greater net present
value than the deposit of Industrial Minerals; and

 
(ii)  
Malagasy can demonstrate to the satisfaction of ERG, acting reasonably, that the
deposit of Other Minerals can and will be developed and mined within the same
timeframe as ERG proposes to develop and mine the deposit of Industrial
Minerals. For the purpose clause 8.6(b)(ii), Malagasy must produce for ERG’s
consideration a Bankable Feasibility Study or equivalent study.

 
In this clause 8.6(b), “Ore Reserve”, “Measured Resource” and “competent person”
have the meanings ascribed to those terms in the 2012 Australasian Code for
Reporting of Exploration Results, Mineral Resources and Ore Reserves prepared by
the Joint Ore Reserves Committee of the Australasian Institute of Mining and
Metallurgy, Australian Institute of Geoscientists and Minerals Council of
Australia and known as the 2012 JORC Code.
 

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(c)  
Subject to clause 8.6(d), if ERG and Malagasy are unable to negotiate the joint
development of the Industrial Minerals and Other Minerals, then as part of the
development of the Industrial Minerals, ERG will, on receiving a written
notification from Malagasy, stockpile the Other Minerals so that Malagasy may
have the benefit of the development of the Other Minerals once ERG has ceased
Mining.

 
(d)  
Any stockpiling costs associated with the development of Industrial Minerals
(including overburden and waste) will be at the expense of ERG. Any costs
associated with the stockpiling of Other Minerals undertaken at the request of
Malagasy which are not activities which would have been incurred by ERG in the
course of Mining Operations in any event, including (but not limited to) any
ongoing environmental compliance costs, will be funded 100% by Malagasy.

 
9.  
Representations and warranties

 
9.1  
Representations and warranties by Energizer

 
Energizer represents and warrants to Malagasy as at the Execution Date that:
 
(a)  
it is validly incorporated and subsisting under the laws of Minnesota, USA;

 
(b)  
the execution and delivery of this Agreement has been duly and validly
authorised by all necessary corporate action;

 
(c)  
it has corporate power and lawful authority to execute and deliver this
Agreement and to observe and perform or cause to be observed and performed all
of its obligations in and under this Agreement;

 
(d)  
this Agreement does not conflict with or constitute or result in a material
breach of or default under any agreement, deed, writ, order, injunction,
judgment, law, rule or regulation to which it is a party or is subject or by
which it is bound in a manner which may materially and adversely affect the
rights and interests of a Party under this Agreement; and

 
(e)  
it is solvent and is capable of performing its obligations under this Agreement.

 
9.2  
Representations and warranties by Malagasy

 
(a)  
Malagasy represents and warrants to Energizer and ERG as at the Execution Date
that:

 
(i)  
it is validly incorporated and subsisting under the laws of Australia;

 
(ii)  
the execution and delivery of this Agreement has been duly and validly
authorised by all necessary corporate action;

 

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(iii)  
it has corporate power and lawful authority to execute and deliver this
Agreement and to observe and perform or cause to be observed and performed all
of its obligations in and under this Agreement;

 
(iv)  
subject to clause 9.3, this Agreement does not conflict with or constitute or
result in a material breach of or default under any agreement, deed, writ,
order, injunction, judgment, law, rule or regulation to which it is a party or
is subject or by which it is bound in a manner which may materially and
adversely affect the rights and interests of a Party under this Agreement; and

 
(v)  
it is solvent and is capable of performing its obligations under this Agreement.

 
(b)  
Subject to clause 9.3, Malagasy represents and warrants to Energizer, ERG and
MadagascarCo as at the Execution Date, and as at the date of execution of the
Additional Permits Area Subleases that:

 
(i)  
it has full right, power and authority to procure the MGY Subsidiaries to grant
the Additional Permits Area Subleases to MadagascarCo in accordance with this
Agreement;

 
(ii)  
one or more of the MGY Subsidiaries are the registered and beneficial holders of
the Additional Exploration Permits as identified in this Agreement.

 
(iii)  
no person other than Malagasy, Energizer and/or their Related Bodies Corporate
has any proprietary rights of any nature in respect of the Additional
Exploration Permits and they have not granted to any person any rights to own or
possess any interest or any rights to explore or prospect for minerals or to
mine the same in any part of the land comprising the Additional Exploration
Permits;

 
(iv)  
the Additional Exploration Permits are free of any Encumbrances except to the
extent of any conditions imposed under the Mining Code on the Additional
Exploration Permits;

 
(v)  
there is no litigation or proceeding of any nature concerning the Additional
Exploration Permits, pending or threatened against them or any other person
which may defeat, impair, detrimentally affect or reduce the right, title and
interest of the Additional Permit Holders, Malagasy or their Related Bodies
Corporate in the Additional Exploration Permits or the interest therein,
including any plaint seeking forfeiture of the Additional Exploration Permits;

 
(vi)  
to the best of its knowledge, the Additional Exploration Permits have been duly
marked off, granted and applied for in accordance with the Mining Code;

 
(vii)  
the Additional Exploration Permits are in Good Standing under the Mining Code
and they are not in breach or contravention of any of the terms and conditions
upon which the Additional Exploration Permits were granted or of any other rule,
regulation or provision of the Mining Code or any other statute concerning,
affecting or relating to the Additional Exploration Permits;

 

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(viii)  
to the best of Malagasy’s knowledge, information and belief, there are no facts
or circumstances that could, under the currently applicable laws of Madagascar,
give rise to the cancellation, forfeiture or suspension or grant of the
Additional Exploration Permits when renewed, that could have a Material Adverse
Effect;

 
(ix)  
except as disclosed to Energizer before the date of this Agreement, there are no
agreements or dealings in respect of the Additional Exploration Permits;

 
(x)  
there is not in existence any current compensation agreement with the owner or
occupier of any land which is subject to the Additional Exploration Permits;

 
(xi)  
there are no Environmental Liabilities relating to or affecting the Additional
Exploration Permits, except to the extent of any report, study or assessment
required to be lodged pursuant to the Mining Code or other regulation in
relation to the Additional Exploration Permits;

 
(xii)  
the Additional Exploration Permits have been granted in respect of all of the
ground described in the Additional Exploration Permits, other than as a result
of a compulsory surrender required under the Mining Code or other law effecting
the Additional Exploration Permits; and

 
(xiii)  
to the best of its knowledge, Malagasy and the MGY Subsidiaries have done
everything that can be done to keep the JV Exploration Permits and the
Additional Exploration Permits in Good Standing. For the purpose of this
warranty, the Parties agree and acknowledge that due to the matters described in
Recital D, neither Malagasy nor the MGY Subsidiaries can obtain formal
recognition from the Mining Department or other relevant authority that the JV
Exploration Permits or the Additional Exploration Permits are legally valid or
effective with regard to the ERG Project Industrial Mineral Rights or Other
Mineral Rights.

 
9.3  
Limitation of warranties and disclaimer of liability by Malagasy

 
Malagasy is not liable for any loss arising from a breach of the warranties and
representations in clause 9.2(b) to the extent such loss is:
 
(a)  
incurred as a result of a Political Event;

 
(b)  
disclosed by Malagasy to Energizer and ERG or is known by Energizer and ERG
prior to Completion; or

 
(c)  
caused or contributed to by a breach by Energizer, ERG or MadagascarCo or their
respective obligations under this Agreement.

 

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10.  
Guarantees

 
10.1  
Guarantee by Malagasy

 
(a)  
Malagasy agrees to guarantee to Energizer, ERG and MadagascarCo the due
performance and observance by each of MDA, Mazoto and Energex of each and every
obligation of MDA, Mazoto and Energex under:

 
(i)  
this Agreement;

 
(ii)  
the JV Sublease Agreements; and

 
(iii)  
Additional Permits Area Sublease Agreements.

 
(b)  
Malagasy agrees to indemnify Energizer, ERG and MadagascarCo in relation to any
loss suffered as a result of MDA, Mazoto or Energex failing to perform or
observe any of their obligations under:

 
(i)  
this Agreement;

 
(ii)  
the JV Sublease Agreements; and

 
(iii)  
Additional Permits Area Sublease Agreements.

 
10.2  
Guarantee by Energizer

 
(a)  
By executing this Agreement, Energizer guarantees to Malagasy the due
performance and observance by ERG and MadagascarCo of each and every obligation
of ERG and MadagascarCo under:

 
(i)  
this Agreement; and

 
(ii)  
any Other Minerals Sublease Agreement entered into by the Parties in accordance
with this Agreement.

 
(b)  
Energizer agrees to indemnify Malagasy in relation to any loss suffered as a
result of ERG or MadagascarCo failing to perform or observe any of their
obligations under:

 
(i)  
this Agreement; and

 
(ii)  
any Other Minerals Sublease Agreement entered into by the Parties in accordance
with this Agreement,

 
other than those obligations of ERG under this Agreement that relate to a Mining
Area.
 
11.  
Assignment

 
(a)  
No Party may assign, sublet, licence or otherwise transfer or part with,
mortgage, encumber or in any way deal with its interest under this Agreement
otherwise than in accordance with the provisions of this Agreement.

 

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(b)  
At any time during the Term, Energizer or ERG may assign all or any of its
rights or obligations under this Agreement as a matter of right to any Related
Body Corporate of Energizer without Malagasy’s consent, provided that the
assignee enters into an Accession Deed.

 
(c)  
At any time during the Term, Malagasy may assign all or any of its rights or
obligations under this Agreement as a matter of right to any Related Body
Corporate of Malagasy without Energizer’s consent, provided that the assignee
enters into an Accession Deed and is capable of performing the obligations so
assigned.

 
12.  
Termination

 
12.1  
Event of Default

 
(a)  
Should a Party fail to do, execute or perform any material act or thing which
such Party is obliged to do, execute or perform pursuant to this Agreement
(Event of Default), the aggrieved Party may give the defaulting Party a notice
requiring the defaulting Party to remedy such Event of Default within a period
of 30 days following service of the notice or if such default is not capable of
being remedied within such period of 30 days then within such further period as
the aggrieved Party or Parties shall deem reasonable.

 
(b)  
If a Party serves a notice of default under clause 12.1(a) and such default
remains un-remedied upon expiry of the period specified in such notice for
rectification, the aggrieved Party may terminate this Agreement forthwith upon
the service of a further notice in writing to that effect and upon the service
of such further notice this Agreement shall terminate forthwith without
prejudice to the rights and remedies of the aggrieved Party at law or otherwise
howsoever arising.

 
(c)  
Clause 12.1(a) does not apply to any Event of Default for which another remedy
is provided in this Agreement.

 
12.2  
Effect of termination

 
(a)  
Termination of this Agreement releases each Party from any further performance
of any liability under this Agreement but does not:

 
(i)  
affect any provision of this Agreement expressed to operate or have effect after
termination; or

 
(ii)  
have any prejudicial effect on any accrued right of any Party in relation to any
breach or default under this Agreement by any other Party occurring before
termination.

 
(b)  
If this Agreement is terminated in accordance with clause 12.1, the aggrieved
Party has an option to acquire the defaulting Party’s rights and interests under
this Agreement at:

 
(i)  
a value determined by the Parties negotiating in good faith; or

 
(ii)  
in the absence of agreement under clause 12.2(b)(i) above, a discount of 10% to
market value as determined by an independent expert appointed in accordance with
clause 16.2.

 

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12.3  
Continuing remedies

 
Each Party, following termination of this Agreement under this clause 12,
retains any right against any other Party under this Agreement in relation to
any breach or default by that other Party that accrued before termination, in
addition to any other right provided by law, except to the extent that the
liability of that other Party is excluded or limited under any provision of this
Agreement.
 
13.  
Force Majeure

 
13.1  
Force Majeure

 
In this clause 13, Force Majeure means any act, event or cause which is beyond
the reasonable control of the Party concerned (other than lack of or inability
to use funds), including:
 
(a)  
act of God, accident of navigation, war (whether declared or not), sabotage,
insurrection, civil commotion, national emergency (whether in fact or law),
martial law, fire, lightning, flood, earthquake, landslide, storm or other
severe adverse weather conditions, explosion, power shortage, strike or other
labour difficulty (whether or not involving employees of a Party concerned),
epidemic, quarantine, radiation or radioactive contamination;

 
(b)  
action or inaction of any government or governmental or other competent
Governmental Agency (including any court) including expropriation, restraint,
prohibition, intervention, requisition, requirement, direction or embargo by
legislation, regulation or other legally enforceable order;

 
(c)  
delay in the grant of access to an ERG Project Permit;

 
(d)  
inability to secure, on commercially acceptable terms, rights of access to a
Permit from the owners, occupiers, lessees, custodians, trustees, native title
claimants or holders of any land to which the ERG Project Permit relates;

 
(e)  
breakdown of plant, machinery or equipment or shortages of labour,
transportation, fuel, power, plant, machinery, equipment or material; and

 
(f)  
any other cause which by the exercise of foresight or due diligence, a Party is
unable to prevent or overcome.

 
13.2  
Relief

 
If, as a direct result of Force Majeure, a Party becomes unable, wholly or in
part, to perform any of its obligations or to exercise a right under this
Agreement:
 
(a)  
that Party is to give the other Party prompt notice of the Force Majeure with
reasonably full particulars and, insofar as known to it, the probable extent to
which it will be unable to perform, or be delayed in performing its obligation
or exercising its right;

 

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(b)  
that obligation, other than an obligation to pay money, is suspended and the
time for performing that obligation or for exercising that right is extended but
only so far as and for so long as it is affected by the Force Majeure; and

 
(c)  
the affected Party is to use all possible diligence to overcome or remove the
Force Majeure as quickly as possible.

 
13.3  
Labour disputes

 
Clause 13.2(c) does not require the affected Party to:
 
(a)  
settle any strike or other labour dispute on terms contrary to its wishes; or

 
(b)  
contest the validity or enforceability of any law, regulation or legally
enforceable order by way of legal proceedings.

 
13.4  
Resumption

 
The obligation of the affected Party to perform its obligations, resumes as soon
as it is no longer affected by the Force Majeure.
 
14.  
Dispute resolution

 
14.1  
Application

 
This clause 14 applies to any dispute or difference (dispute) (other than a
dispute to which clause 15 applies) arising between the Parties in relation to:
 
(a)  
this Agreement or its interpretation;

 
(b)  
any right or liability of any Party under this Agreement; or

 
(c)  
the performance of any action by any Party under or arising out of this
Agreement, whether before or after its termination.

 
14.2  
Dispute negotiation

 
(a)  
A Party must not commence legal proceedings in relation to a dispute or refer a
dispute to arbitration under this Agreement, unless that Party has complied with
this clause 14.

 
(b)  
A Party claiming that a dispute has arisen must notify the other Party
specifying details of the dispute.

 
(c)  
Each Party must refer a dispute to an authorised officer of that Party for
consideration and use its best efforts to resolve the dispute through
negotiation within seven (7) Business Days following the dispute notification or
longer period agreed between the Parties.

 

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(d)  
Each Party must refer the dispute to its chief executive officer, in the event
that the authorised officers of the Parties fail to resolve the dispute within
the specified period.

 
(e)  
Each Party must following reference to its chief executive officer use its best
efforts to resolve the dispute by agreement or through an agreed mediation
procedure.

 
(f)  
A Party in compliance with this clause 14.2 may terminate the dispute resolution
process by notice to the other Party at any time after seven (7) Business Days
following reference of the dispute to its chief executive officer.

 
(g)  
A Party is not required to comply with this clause 14.2 in relation to any
dispute where the other Party is in breach of or default under this clause 14.2
in relation to that dispute.

 
14.3  
Arbitration

 
Each Party must submit any dispute which remains unresolved following the
negotiation process specified in clause 14.2 to arbitration under the
Arbitration Rules of SIAC in accordance with the following procedures:
 
(a)  
the arbitration will be conducted by three arbitrators, who will be appointed as
agreed by the Parties or, failing such agreement, by the Deputy President of
SIAC or his or her nominee;

 
(b)  
the arbitration will be conducted in English;

 
(c)  
each Party is entitled to legal representation at any arbitration; and

 
(d)  
any arbitration will be conducted in Singapore, or at such other place as the
Parties may agree.

 
14.4  
Urgent relief

 
A Party may at any time apply to a court of competent jurisdiction for any
equitable or other remedy for reasons of urgency, despite anything contained in
this clause 14.
 
14.5  
Continued performance

 
A Party must continue to perform any obligation or liability of that Party in
compliance with this Agreement relating to any issue in dispute, despite and
during any dispute negotiation or arbitration being conducted under this clause
14.
 
15.  
Disputes as to Technical or Financial Matters

 
15.1  
Definitions

 
In this clause 15:
 
(a)  
Technical Matter means a matter which is capable of determination by reference
to Mining knowledge or practice; and

 
(b)  
Financial Matter means a matter which is capable of determination by audit or
reference to financial or accounting records, knowledge or practice.

 

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15.2  
Application

 
(a)  
This clause 15 applies to any dispute arising between the Parties in relation to
a Financial Matter or a Technical Matter.

 
(b)  
This clause 15 does not prevent any Party from seeking urgent interlocutory or
declaratory relief from a court of competent jurisdiction where, in that Party's
reasonable opinion, that action is necessary to protect that Party's rights.

 
15.3  
Dispute negotiation

 
A Party claiming that a dispute in relation to Financial Matters or Technical
Matters has arisen must notify the other Party specifying details of the dispute
and convene a meeting of the senior management of the Parties within 10 Business
Days of the notice of dispute to discuss the dispute with the aim of resolving
it.
 
15.4  
Independent Expert

 
If the dispute is not resolved by negotiations between the senior management of
the Parties within 20 Business Days of the first meeting between senior
management under clause 15.3 and the Dispute relates to a Financial Matter or a
Technical Matter, either Party may submit the dispute to an Independent Expert
for determination in accordance with clause 16.
 
16.  
Expert Determination

 
16.1  
Referral to Independent Expert

 
Wherever under this Agreement:
 
(a)  
a Party submits a dispute in accordance with clause 15; or

 
(b)  
the Parties agree that a dispute between them will be resolved by an Independent
Expert; or

 
(c)  
a dispute is required by this Agreement to be determined by an Independent
Expert,

 
then the dispute may be referred by either Party to an Independent Expert under
this clause 16.
 
16.2  
Appointment of Independent Expert

 
The procedure for the appointment of an Independent Expert will be as follows:
 
(a)  
the Parties must, within 5 Business Days of a Party submitting a Dispute to an
Independent Expert in accordance with clause 15.4, endeavour to agree upon the
identity of a single Independent Expert to whom the dispute will be referred for
determination as soon as is reasonably practicable;

 

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(b)  
if the Parties are unable to agree upon the identity of a single Independent
Expert within 20 Business Days of first meeting between senior management under
clause 16.2(a), the Parties will, as soon as practicable thereafter:

 
(i)  
in the case of a Financial Matter, request the President of the Institute of
Chartered Accountants in Australia to appoint the Independent Expert; and

 
(ii)  
in the case of a Technical Matter, request the President of the Australasian
Institute of Mining and Metallurgy to appoint the Independent Expert; and

 
(c)  
within 10 Business Days of appointment, the Independent Expert must set a time
and place for receiving the Parties’ submissions.

 
16.3  
Requirements of Independent Expert

 
(a)  
The Independent Expert will be required to have appropriate commercial and
practical experience and expertise in the area of the dispute.

 
(b)  
Any person nominated to act as an Independent Expert will be required to fully
disclose any interest or duty prior to that person’s appointment. If that person
has or may have any interest or duty which conflicts with their appointment as
Independent Expert, then that person may not be appointed except with the
agreement of all parties to the dispute.

 
(c)  
Any person nominated to act as an Independent Expert must, before they are
appointed, confirm in writing that they are able to resolve the dispute within a
reasonable time.

 
(d)  
The Independent Expert appointed under clause 16.2 will act as an expert and not
as an arbitrator.

 
16.4  
Rights of the Parties

 
Each Party:
 
(a)  
may be legally represented at any hearing before the Independent Expert;

 
(b)  
is entitled to produce to the Independent Expert any materials or evidence which
that Party believes is relevant to the dispute; and

 
(c)  
must make available to the Independent Expert all materials requested by the
Independent Expert and all other materials which are relevant to the Independent
Expert’s determination.

 
16.5  
Confidentiality

 
Unless otherwise agreed by the Parties involved in the determination by the
Independent Expert, all material and evidence made available for the purposes of
the determination must be kept private and confidential.
 

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16.6  
Determination

 
(a)  
The Independent Expert must make a determination on the dispute within 70
Business Days of appointment and must determine what, if any, adjustments may be
necessary between the Parties. The determination of the Independent Expert:

 
(i)  
must be in the form of a written report;

 
(ii)  
will be final and binding upon the Parties except in the case of bias, fraud,
manifest mistake or error; and

 
(iii)  
will be kept private and confidential unless otherwise agreed to by all Parties
involved in the determination.

 
(b)  
If the Independent Expert does not determine the dispute within 70 Business Days
of appointment, the Parties may terminate the appointment by written agreement
and a new Independent Expert will be appointed within 10 Business Days in
accordance with the procedure set out in clause 16.2.

 
16.7  
Costs of Independent Expert

 
The costs in relation to a determination by the Independent Expert will be dealt
with as follows:
 
(a)  
the costs of the Independent Expert will be apportioned between the Parties in
such proportions as the Independent Expert thinks fit, otherwise the Parties
will each bear their own costs; and

 
(b)  
the Parties will each bear their own costs incurred in the preparation and
presentation of any submissions or evidence to the Independent Expert.

 
17.  
Status of Agreement and further acts

 
(a)  
The Parties agree that this Agreement is binding upon them and intend that this
Agreement is legally enforceable in accordance with its terms.

 
(b)  
Each Party must promptly do all further acts and execute and deliver all further
documents (in form and content reasonably satisfactory to that Party) required
by law or reasonably requested by any other party to give effect to this
Agreement and the transactions contemplated by this Agreement.

 
18.  
Relationship between Parties

 
(a)  
Nothing in this Agreement is to be construed so to constitute a Party a partner,
agent or representative of any other Party or to create any partnerships or
trust for any purpose howsoever except to the extent to which the operator is
the agent of the Parties. No Party will be under any fiduciary or other duty to
the other which will prevent it from engaging in or enjoying the benefits of any
competing endeavours subject to the express provisions of this Agreement.

 

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(b)  
No Party will have any authority to act on behalf of any other Party, except as
expressly provided in this Agreement. Where a Party acts on behalf of another
without authority, such Party must indemnify the other from any losses, claims,
damages and liabilities arising out of any such act.

 
(c)  
Each Party has the unrestricted right to engage in and receive the full benefit
of any competing activities outside of the ERG Project Area.

 
19.  
Confidentiality and public announcements

 
19.1  
Confidentiality

 
Subject to clause 19.6, each Party (for this clause Recipient) who is in
possession or control of or has access to Confidential Information of another
Party or a Related Body Corporate of another Party (Owner) must use that
Confidential Information only for the purposes of acts contemplated by this
Agreement, and keep that Confidential Information confidential and not disclose
it or allow it to be disclosed to any third party except:
 
(a)  
if the information is at the time generally and publicly available other than as
a result of breach of confidence by the Recipient;

 
(b)  
if the information is at the time lawfully in the possession of the proposed
recipient of the information through sources other than the Recipient;

 
(c)  
by the Recipient to legal and other professional advisers and other consultants
and officers and employees of:

 
(i)  
the Recipient; or

 
(ii)  
the Recipient's Related Bodies Corporate,

 
in any case requiring the information for the purposes of this Agreement or any
transaction contemplated by it, or for the purpose of advising that Party in
relation thereto;
 
(d)  
with the prior written consent of the Owner;

 
(e)  
to the extent required by law or by a lawful requirement of any Governmental
Agency having jurisdiction over the Recipient or any of its Related Bodies
Corporate;

 
(f)  
if required in connection with legal proceedings or arbitration relating to this
Agreement or for the purpose of advising the Recipient in relation thereto;

 
(g)  
if and to the extent that it may be necessary or desirable to disclose to any
Governmental Agency in connection with applications for consents, approvals,
authorities or licenses in relation to this Agreement;

 
(h)  
to the extent required by a lawful requirement of any stock exchange having
jurisdiction over the Recipient or any of its Related Bodies Corporate;

 

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(i)  
if necessary to be disclosed in any prospectus or information memorandum to
investors or proposed or prospective investors:

 
(i)  
for an issue or disposal of any shares or options in the Recipient or any of its
Related Bodies Corporate;

 
(ii)  
for an issue of debt instruments of the Recipient or any of its Related Bodies
Corporate; or

 
(iii)  
for the purposes of the Recipient obtaining a listing on any stock exchange of
any shares, options or debt instruments;

 
(j)  
if necessary to be disclosed to a professional investor or investment adviser
for the purposes of enabling an assessment to be made about the merits or
otherwise of an investment in the Recipient or any of its Related Bodies
Corporate;

 
(k)  
if necessary to be disclosed to an existing or bona fide proposed or
prospective:

 
(i)  
financier of the Recipient or of any of its Related Bodies Corporate; or

 
(ii)  
rating agency in respect of the Recipient or of any of its Related Bodies
Corporate;

 
(l)  
if necessary to be disclosed to any bona fide proposed or prospective:

 
(i)  
transferee of any property to which the information relates or of any shares in
the Recipient or any Related Body Corporate of the Recipient;

 
(ii)  
financier of such transferee providing or proposing or considering whether to
provide financial accommodation; or

 
(iii)  
assignee of rights under the Recipient's financing documents; or

 
(m)  
if necessary to be disclosed to legal and other professional advisers and other
consultants and officers or employees of any of the persons referred to in
clause 19.1(j), 19.1(k), or 19.1(l).

 
19.2  
Conditions

 
(a)  
In the case of a disclosure under clause 19.1(c) or 19.1(d) and, where
appropriate, under clause 19.1(e) and 19.1(f), the Party wishing to make the
disclosure must inform the proposed recipient of the confidentiality of the
information and the Party must take such precautions as are reasonable in the
circumstances to ensure that the proposed recipient keeps the information
confidential.

 
(b)  
In the case of a disclosure under clause 19.1(g), 19.1(h) and 19.1(i), the Party
wishing to make the disclosure may only do so:

 

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(i)  
with the written consent of both Parties, which must not be unreasonably
withheld or delayed; or

 
(ii)  
to the extent required by law, the official rules of the relevant stock exchange
or any Governmental Agency, but if any Party is required to make any such
announcement, it must promptly notify the other Party, where reasonably
practicable and lawful to do so, before the announcement is made and must confer
with the other Party and consider any comments of the other Party regarding the
timing and content of such announcement or any action which the other Party may
reasonably elect to take to challenge the validity of such requirement, subject
at all times to the disclosing Party’s obligations under law, the official rules
of the relevant stock exchange or any Governmental Agency.

 
(c)  
In the case of a disclosure under clause 19.1(j), 19.1(k) or 19.1(l) or (in the
case of legal and other professional advisers and other consultants only)
19.1(m) the Party wishing to make the disclosure must not make any disclosure
unless:

 
(i)  
in the case of a disclosure under clause 19.1(j), 19.1(k) or 19.1(l) the
proposed recipient has first entered into and delivered to the Recipient a
confidentiality undertaking in a form acceptable to the other Parties; or

 
(ii)  
in the case of a disclosure under clause 19.1(m) the principal or employer of
the proposed recipient has first entered into and delivered to the Recipient a
confidentiality undertaking in a form acceptable to the other Parties which will
incorporate a warranty by the principal or employer of the proposed recipient
that the proposed recipient is under an obligation of confidentiality to the
principal or employer and that the principal or employer will enforce that
obligation to the fullest extent that the law or equity allows upon being called
upon to do so by any of the Parties.

 
19.3  
Notice to other Parties

 
Each Party must:
 
(a)  
promptly inform each other Party of any request received by that Party from any
person described in clause 19.1(e) to disclose information under that clause;

 
(b)  
inform all other Parties as soon as reasonably practicable after information is
disclosed by the Party under clause 19.1(e); and

 
(c)  
not disclose any information under clause 19.1 unless all other Parties have
been informed of the proposed disclosure.

 
19.4  
Indemnities

 
Each Party indemnifies each other Party against any costs, losses, damages and
liabilities suffered or incurred by that other Party arising out of or in
connection with any disclosure by the first-mentioned Party of information in
contravention of this clause 19.
 

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19.5  
Survival of confidentiality obligations

 
The obligations of confidentiality imposed by this clause 19 survive the
termination of this Agreement and any person who ceases to be a Party continues
to be bound by those obligations.
 
19.6  
Use of Mining Information in respect to Other Mineral Rights

 
Nothing in this clause 19 prevents Malagasy from using the Mining Information in
relation to the exploration and development of the Other Minerals.
 
20.  
Notices

 
Each communication (including each notice, consent, approval, request and
demand) under or in connection with this Agreement:
 
(a)  
must be in writing;

 
(b)  
must be addressed as follows (or otherwise notified by that Party to the other
Party from time to time):

 
To Energizer and ERG
Energizer Resources Inc
       
Attention:
Chief Executive Officer        
Address:
Energizer Resources Inc.
141 Adelaide Street
West Suite 520
Toronto, Ontario
CANADA
       
Facsimile:
+1 416.364.2753      
To Malagasy
Malagasy Minerals Limited
        Attention: Company Secretary        
Address:
Malagasy Minerals Limited
15 Lovegrove Close
Mount Claremont
Western Australia 6010
AUSTRALIA
       
Facsimile:
+61 8 9284 3801

 
(c)  
must be signed by the Party making it or (on that party’s behalf) by the
solicitor for or any attorney, director, secretary or authorised agent of that
Party;

 
(d)  
must be delivered by hand or posted by prepaid post to the address, or sent by
fax to the number, of the addressee; and

 

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(e)  
is taken to be received by the addressee:

 
(i)  
(in the case of prepaid post sent to an address in the same country) on the
third day after the date of posting;

 
(ii)  
(in the case of prepaid post sent to an address in another country) on the fifth
day after the date of posting;

 
(iii)  
(in the case of fax) at the time in the place to which it is sent equivalent to
the time shown on the transmission confirmation report produced by the fax
machine from which it was sent; and

 
(iv)  
(in the case of delivery by hand) on delivery;

 
but if the communication is taken to be received on a day that is not a working
day or after 5.00 pm, it is taken to be received at 9.00 am on the next working
day (“working day” meaning a day that is not a Saturday, Sunday or public
holiday, and is a day on which banks are open for business generally, in the
place to which the communication is posted, sent or delivered).
 
21.  
Miscellaneous

 
21.1  
Governing law

 
This Agreement is governed by and must be construed according to the law
applying in Ontario, Canada.
 
21.2  
Amendments

 
This Agreement may only be varied by a document signed by or on behalf of each
of the Parties.
 
21.3  
Primacy of this Agreement

 
The Parties agree that this Agreement has primacy over any ancillary agreement
contemplated by this Agreement and, in the case of inconsistency, the terms and
conditions of this Agreement will prevail. Each Party agrees that it will
procure that any subsidiary of it will comply with the terms of this Agreement
notwithstanding any inconsistency between this Agreement any ancillary agreement
contemplated by this Agreement which a subsidiary of a Party is a party to.
 
21.4  
Language

 
Where this Agreement or any ancillary agreement to this Agreement, including the
Sublease Agreements, is written and signed in any other language other than
English (including French), both versions are equally valid. However, in the
case of inconsistency, the Parties agree that the English version of the
relevant agreement shall prevail.
 
21.5  
Waiver

 
(a)  
Failure to exercise or enforce, or a delay in exercising or enforcing, or the
partial exercise or enforcement, of a right provided by law or under this
Agreement by a Party does not preclude, or operate as a waiver of, the exercise
or enforcement, or further exercise or enforcement, of that or any other right
provided by law or under this Agreement.

 

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(b)  
A waiver or consent given by a Party under this Agreement is only effective and
binding on that Party if it is given or confirmed in writing by that Party.

 
(c)  
No waiver of a breach of a term of this Agreement operates as a waiver of
another breach of that term or of a breach of any other term of this Agreement.

 
21.6  
Consents

 
A consent required under this Agreement from a Party may be given or withheld,
or may be given subject to any conditions, as that Party in its absolute
discretion thinks fit, unless this Agreement expressly provides otherwise.
 
21.7  
Counterparts

 
This Agreement may be executed in any number of counterparts and by the Parties
on separate counterparts. Each counterpart constitutes an original of this
Agreement and all together constitute one agreement.
 
21.8  
No representation or reliance

 
(a)  
Each Party acknowledges that neither Party (nor any person acting on a Party’s
behalf) has made any representation or other inducement to it to enter into this
Agreement except for representations or inducements expressly set out in this
Agreement.

 
(b)  
Each Party acknowledges and confirms that it does not enter into this Agreement
in reliance on any representation or other inducement by or on behalf of the
other Party, except for representations or inducements expressly set out in this
Agreement.

 
21.9  
Expenses

 
Except as otherwise provided in this Agreement, each Party must pay its own
costs and expenses in connection with negotiating, preparing, executing and
performing this Agreement.
 
21.10  
Entire agreement

 
To the extent permitted by law, in relation to its subject matter this
Agreement:
 
(a)  
embodies the entire understanding of the Parties, and constitutes the entire
terms agreed by the Parties; and

 
(b)  
supersedes any prior written or other agreement of the Parties.

 

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21.11  
Indemnities

 
(a)  
Each indemnity in this Agreement is a continuing obligation, separate and
independent from the other obligations of the Parties, and survives termination,
completion or expiration of this Agreement.

 
(b)  
It is not necessary for a Party to incur expense or to make any payment before
enforcing a right of indemnity conferred by this Agreement.

 
(c)  
A Party must pay on demand any amount it must pay under an indemnity in this
Agreement.

 
21.12  
Severance and enforceability

 
Any provision, or the application of any provision, of this Agreement that is
void, illegal or unenforceable in any jurisdiction does not affect the validity,
legality or enforceability of that provision in any other jurisdiction or of the
remaining provisions of this Agreement in that or any other jurisdiction.
 
21.13  
No merger

 
The rights and obligations of the Parties under this Agreement do not merge on
completion of any transaction under this Agreement, and survive the execution
and delivery of any assignment or other document entered into for the purpose of
implementing any transaction under this Agreement.
 
21.14  
Power of attorney

 
(a)  
Each attorney who signs this Agreement on behalf of a Party declares that the
attorney has no notice from the Party who appointed him that the power of
attorney granted to him, under which the attorney signs this Agreement, has been
revoked or suspended in any way.

 
(b)  
Each Party represents and warrants to each other that its respective attorney or
authorised officer who signs this Agreement on behalf of that Party has been
duly authorised by that Party to sign this Agreement on its behalf and that
authorisation has not been revoked.

 
21.15  
Taxes

 
(a)  
For the purpose of this clause 21.15, Tax means a tax including any value added
or goods and services taxes (including TVA), rate, levy, duty (other than a tax
on the net overall income of a Party) and any interest penalty fine or expense
relating to any of them.

 
(b)  
Subject to clause 21.15(c), any Taxes that may be imposed by any authorities in
connection with this Agreement and any Taxes, fees or costs in relation to the
transfer of the ERG Project Permits under this Agreement and registration of
this Agreement will be paid by the Energizer.

 
(c)  
Any Taxes which may be imposed by any authorities in connection with the the
grant of the Additional Industrial Mineral Rights under this Agreement will be
apportioned equally between the Energizer and Malagasy.

 
(d)  
Energizer will indemnify and hold the Malagasy harmless against any liability
for the Purchaser’s obligations set out in clauses 21.15(b) and 21.15(c),
provided that under no circumstances will the Energizer be liable or accountable
for any capital gains tax or income tax liability of Malagasy.

 

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Schedule 1 – Industrial Minerals
 
Vanadium
Lithium
Aggregates
Alunite
Barite
Bentonite
Vermiculite
Carbonatites
Corundum
Dimension stone, other than labradorite
Feldspar, other than labradorite
Fluorspar
Granite
Graphite
Gypsum
Kaolin
Kyanite
Limestone / Dolomite
Marble
Mica
Olivine
Perlite
Phosphate
Potash – Potassium minerals
Pumice
Quartz
Staurolite
Zeolites
 

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Schedule 2 – Additional Exploration Permits
 
Item
Exploration Permit
1
3432
2
14618

 
 
 
 
 
 
 
 
 

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Schedule 3 - Map of ERG Project Area, JV Area and Additional Permits Area
 
 
 
 
 
 
 
 
 
 
 
 
 

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Schedule 4 – JV Exploration Permits
 
Item
Exploration Permit
 
Item
Exploration Permit
1
3432
 
21
21064
2
5394
 
22
24864
3
13064
 
23
25605
4
13811
 
24
25606
5
14619
 
25
28340
6
14620
 
26
28346
7
14622
 
27
28347
8
14623
 
28
28348
9
16747
 
29
28349
10
16753
 
30
28352
11
19003
 
31
28353
12
19851
 
32
29020
13
19932
 
33
31734
14
19934
 
34
31735
15
19935
 
35
38323
16
21059
 
36
38324
17
21060
 
37
38325
18
21061
 
38
38392
19
21062
 
39
38469
20
21063
     

 

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Executed as an agreement
 
Signed as an agreement by Energizer
Resources Inc.
)
)
)
       
/s/ Peter Liabotis
 
/s/ Richard Schler
Signature
 
Signature
     
Peter Liabotis
 
Richard Schler
Print name
 
Print name
     
CFO
 
CEO

 
Signed as an agreement by Malagasy
Minerals Limited (ACN 121 700 105)
)
)
)
       
/s/ Graeme Raymond Boden
 
/s/ Natasha Lee Forde
Signature
 
Signature
     
Graeme Raymond Boden
 
Natasha Lee Forde
Print name
 
Print name
     
Director
 
Company Secretary

 
Signed as an agreement by Madagascar-
ERG Joint Venture (Mauritius) Ltd
)
)
)
       
/s/ Peter Liabotis
 
/s/ Richard Schler
Signature
 
Signature
     
Peter Liabotis
 
Richard Schler
Print name
 
Print name
     
Director
 
Company Secretary / Director

 

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Annexure A – Additional Permits Area
 
 
 
 
 
 
 
 
 
 
 
 

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Annexure B – JV Area
 
 
 
 
 
 
 
 
 
 
 
 

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Annexure C – Additional Permits Area Sublease Agreements
 
 
 
 
 
 
 
 
 
 
 
 

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Annexure D – JV Sublease Agreements
 
 
 
 
 
 
 
 
 
 
 
 

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