2**TABLE OF CONTENTS**       **PART A: JOINT VENTURE AGREEMENT**  **3**        PARTY DETAILS:  3 BACKGROUND:  3 1. DEFINITIONS AND INTERPRETATIONS  5        **PART B. JOINT VENTURE ESTABLISHMENT PROVISIONS**  **11**        2. GENERAL OBJECTIVES  11 3. ESTABLISHMENT OF THE ENTERPRISE  12 4. CHARTER CAPITAL AND RESPONSIBILITIES OF PARTIES  12 5 TERM AND TERMINATION  14        **PART C. JOINT VENTURE PROCEDURAL PROVISIONS**  **16**        6 INVESTMENT CERTIFICATE APPLICATION  16 7. EXPLORATION LICENCE APPLICATION  17 8 COMPREHENSIVE MINING FEASIBILITY STUDY  17 9 DECISION TO MINE  18 10 MINING DEVELOPMENT  19 11 MATERIALS AND LABOUR  19 12 ENVIRONMENTAL PROTECTION  20        **PART D. JOINT VENTURE FINANCIAL PROVISIONS**  **21**        13 TOTAL INVESTED CAPITAL AND FINANCING  21 14 DISTRIBUTION OF PROFITS  21 15 TRANSFER OF PARTICIPATING INTEREST  22 16 ACCOUNTING PRINCIPLES  23 17 BANKING AND INSURANCE  24 18 SALE OF PRODUCT  24        **PART E. JOINT VENTURE REGULATORY PROVISIONS**  **25**        19 BOARD OF MEMBERS  25 20 MEETINGS OF THE BOARD OF MEMBERS  25 21 GENERAL MANAGEMENT OF THE ENTERPRISE  27 22 CONFIDENTIALITY  30 23 FORCE MAJEURE  30 24 DISPUTES AND ARBITRATION  31 25 DEFAULT  31 26 REPRESENTATIONS AND WARRANTIES  32 27 NOTICES  33 28 MISCELLANEOUS  34 

 

3**PART A: JOINT VENTURE AGREEMENT**Based on the Law on Investment in Vietnam and other relevant legal documents, the Partiesmentioned hereinafter have signed a Joint Venture Agreement to establish in the Socialist Republicof Vietnam a Joint Venture Enterprise as herein described.**PARTY DETAILS:**     **Company** Biotan Minerals Joint Stock Company (BIOTAN)**Authorised Representative:** Mr. Nguyen Van Qua**Title:** Chairman**Head Office:** 422 Nguyen Thai Hoc Street, Quy Nhon City, Binh Dinh Province, Vietnam**Telephone:** 056 210915, or 210916**Fax:** 056 646335**Email:** biotan@bidiphar.com**Business:** Mineral exploration and production**Operation Licence:** Business Registration Certificate No: 3503000084**Registered At:** The Binh Dinh Provincial Department of Planning & Investment on Date: February 17, 2006**Account No:** 580.10.00.0020303.8, at Binh Dinh Branch of the Bank for Investment and Development of Vietnam     **Company** KS Mining Limited (KSML)**Representative:** Mr. Rodney Hugh Murfitt**Title:** Executive Director**Head Office:** Level 2, 63 Fort Street, Auckland, New Zealand.**Telephone:** (64 9) 3798787**Fax:** (64 9) 3798788**Business:** Exploration & exploitation of gold in Binh Ðinh Province, Vietnam**Operation Licence:** 15056**Registered At:** Western Samoa on Date: November 13, 2003**Account No:** ANZ Bank (Hanoi) A/c No: 3678879**BACKGROUND:**A. BIOTAN and KSML wish to cooperate in Mining Operations (exploration, mining development and production of gold and associated minerals) within the Project Area. B. KSML has the financial ability, technical competence and professional skills necessary to carry out the Mining Operations as hereinafter described. C. The Department of Geology & Minerals of Vietnam (DGMV) of the Ministry of Natural Resources and Environment has previously explored the Tien Thuan Project Area andreported a gold mineral resource. KSML has determined that mining feasibility studies in this area would likely support a decision to establish commercial mining operations.

 

4D. KSML and BIOTAN accordingly wish to establish a Joint Venture Enterprise in the form of a limited liability company, for the purposes of completing the above feasibility studies,exploring to expand the resource, developing a mine and commencing commercial production. E. To establish the Joint Venture Enterprise, BIOTAN and KSML have agreed to enter into this Agreement, which will govern all matters concerning each Party’s interest in the Joint Venture and the Enterprise, including applications for Investment Certificateand Exploration and Mining Licences relating to the Project Area, in accordance with Vietnam Mineral and Investment Laws.

 

5**1.** **DEFINITIONS AND INTERPRETATIONS**   **Definitions** 1.1 Unless the context otherwise requires,the terms used in this Agreement shall have the meanings set out below:   **“Agreement”** means the Joint Venture Agreement set forth herein and includes anyschedules and provisions contained in such schedules and anyamendments thereto in accordance with Clause 28.2;   “**Board of Members” and/or**“**Board**” means the board of members of the Enterprise as defined in Clause 19.1;   **“Charter”** means the charter that is executed contemporaneously with thisAgreement and registered with the relevant Vietnamese Authority toestablish the Enterprise under Vietnamese Law and as may from time totime be amended with approval of the relevant Vietnamese Authority.   **“Charter Capital”** means the Charter Capital of the Enterprise as set out in its Charterand more particularly described in Section 4.0;   **“Charter Capital Contribution”** means the Parties respective contribution to the Charter Capital asdescribed in Section 4.0;   “**Commencement Date**” means the date of execution of this Agreement;   “**Decision to Mine**” means a decision to establish and develop a mine in the Project Area,taken by the Board under Section 9.0;   “**Decree 108**” means Decree No. 108/2006/ND-CP, dated 22 September, 2006 of theVietnamese Government providing details and guidelines for theimplementation of the Investment Law;   **“Diluting Party”** has the meaning given to it in clause 4.9;   **“Effective Date”** means the date upon which the Investment Certificate is issued;   “**Enterprise” or “BNG”** means the limited liability company to be established by the Parties,by the registration of the Charter in Vietnam, to carry out theProject as provided for in this Agreement;   **“Expenditure”** means all monies properly expended or to be expended on the Project bythe Enterprise or the Parties pursuant to this Agreement, and includes(but not in limitation) all capital expenditure and costs involved in:

 

6     (a)   Establishing the Enterprise;     (b)   Carrying out Exploration Activities;     (c)   Designing and constructing the Mining Facilities;     (d)   Conducting Mining Operations;     (e)   Any other expenses incurred by the Parties,properly chargeable to theEnterprise.   “**Exploration Activities**” means all activities and operations conducted for thepurpose of delineating and geologically assessingthe Minerals including, but not limited to, allgeological mapping, geochemical, geophysical,geotechnical and environmental surveys, drilling,resource estimation, mine engineering and financialstudies to enable the completion of MiningFeasibility Studies, whether conducted prior to, orpursuant to this Agreement;   **“Exploration Area”** means the area which is more particularly described inSchedule A, as may from time to time be changed byan extension or reduction, in accordance with thisAgreement in accordance with the relevant Laws ofVietnam;**“Exploration Licence”** means a licence issued by the Government on termsacceptable to the Enterprise that authorises theEnterprise to carry out Exploration Activities andgives special rights for a Mining Licence;   **“Feasibility Study”** means a study carried out for the purpose of gatheringinformation for use in or capable of being used inthe preparation of a formal detailed study designedto determine the commercial viability of MiningOperations and includes such study in a format whichis capable of being used for the purpose of securingfrom financial institutions, capital funds forMining Operations, and upon which a decision whether ornot to conduct Mining Operations can be properly based;   **“Force Majeure”** shall include, but not be limited to, strikes, lockouts,labour and civil disturbances, unavoidableaccidents, acts of nature, laws, rules, regulations,orders or decrees of any national, municipal orother law or government agency, acts of war orrebellion and conditions arising out of or attributableto war (declared or undeclared), or other conditionsbeyond the reasonable control of the Parties;   “**Investment Legislation**” means the Law, Decree 108 on Investment and all otherVietnamese legal regulations on investment;

 

7   **“Foreign Party”** includes KSML and any other foreign enterprisethat is admitted as a party to thisAgreement and accedes to thisAgreement at any time during the Term;   **“Government”** means the Government of Vietnam (including thePrime Minister) and its StateCommittees, Ministries, GeneralDepartments, Agencies andInstrumentalities and also includeslocal People’s Committees, Departments andAuthorities;   **“Investment Certificate”** means an Investment Certificate issued byrelevant Vietnamese Authority underthe Investment Legislation, whichauthorises the Enterprise to carry out theProject in the manner contemplated bythe Charter and this Agreement, asmay be extended, amended, varied,supplemented or replaced from time totime by the relevant Vietnamese authorities;   **“Joint Venture**” means the contractual relationship of the Partiesthat shall come into existencepursuant to Section 2.0;   **“Land Law”** means the Law on Land dated 26 November 2003 andDecree No. 142/2005/ND-CP dated 14November, 2005 of the Government onthe collection of land rents and surfacewater rents;   **“Loan Capital”** means the part of the Total Invested Capital notcontributed as Charter Capital thatthe Enterprise may borrow from theParties or from third parties;   **“Minerals”** means all natural deposits and naturalaccumulations containing ores,minerals and/or basic chemical elements ofall kinds, either in elemental form or inassociation or chemical combinationwith other metallic or non-metallicelements (with the exception ofhydrocarbon compounds, coal andradioactive Minerals) located in the ProjectArea including gold, precious metals,and other associated metals andminerals;   **“Mining Area”** means the area known as Tien Thuan, which ismore particularly described inSchedule A as changed by an extensionor reduction in accordance with thisAgreement from time to time with theapproval of the relevant Vietnameseauthorities;   **“Mining Facilities”** means the plant, facilities and infrastructurebuilt or brought onto the ProjectArea for the purpose of mining, milling,crushing, separating, concentrating,smelting, refining, packaging,storing or transporting the Minerals;

 

8   **“Mining Licence”** means a licence issued by the Government on terms acceptable tothe Enterprise to carry out Mining Operations on the ProjectArea or any part of it;   **“Mining Operations”** means all activities conducted for the purpose of constructingthe mine and work or activity of mining, removing,extracting, treating, drying, packaging and handling theMinerals from the Project Area by open pit or undergroundmining or alluvial mining or any other methods now knownor hereafter developed;   **“MOF”** means Vietnam’s Ministry of Finance;   **“MoNRE”** means Vietnam’s Ministry of Natural Resources andEnvironment;   **“MPI”** means Vietnam’s Ministry of Planning and Investment;   **“Non-Diluting Party”** means a Party other than a Diluting Party;   **“Participating Interest”** means, in relation to each Party its percentage of:     (a)     Ownership of the Charter Capital from timeto time, and     (b)     Obligation to contribute to Expenditure, and     (c)     Beneficial ownership as a tenant in commonof an undivided share in allassets held by the Enterprise,and     (d)     The right to receive in kind and dispose offor its own account Minerals(in whatever form) derived fromthe Project Area, and     (e)     All other rights, liabilities andobligations in accordance withthis Agreement, as set out in Clause4.2, or as varied from time to time.   “**Parties**” means the Vietnamese Party and the Foreign Party and theirrespective successors and permitted assignees, and “Party”means any of them as appropriate;   **“Project”** means the conduct of Exploration Activities, the preparation ofFeasibility Studies and, if so decided as described herein, thedesign and construction of Mining Facilities and the conduct ofMining Operations in the Project Area pursuant to thisAgreement and to ultimate sale of Minerals recovered as aresult of Mining Operations;

 

9   **“Project Area”** means the area particularly described inSchedule A, in which allexploration and mining will beconducted, as may be fromtime to time changed by extensionor reduction, in accordancewith this Agreement and with theapproval of the relevantVietnamese authorities;   **“Term”** means the period of time from theCommencement Date to theTermination Date or such earlier orlater date of terminationpursuant to this Agreement;   **“Termination Date”** means the date thirty (30) years afterthe Effective Date or suchlater date of extension of theInvestment Certificate ifagreed to by the relevantVietnamese Authority pursuant toClause 5.2;   **“Third parties**” means any person other than the Parties;   “**Total Invested Capital**” means the total amount to be invested bythe Enterprise in order tocomplete the Project as stated in theInvestment Certificate andas particularly described in Section13.0, as that amount may beamended from time to time;   “**USD**” means the lawful currency of the UnitedStates of America;   “**Vietnam**” means the Socialist Republic of Vietnam;   “**Vietnamese Law”** means all legislation issued by theNational Assembly, theStanding Committee of theNational Assembly and theGovernment, in force from time totime including, but notlimited to, laws, ordinances,decrees, circulars, officialletters, decisions and otherpronouncements; and   “**Vietnamese Party”** includes BIOTAN and any other Vietnameseenterprise that is admittedas a party to this Agreement and accedesto this Agreement at anytime during the Term.**Interpretation**1.2 For the purpose of the interpretation or construction of this Agreement: (a) Except where the context otherwise requires, words importingthe singular include the plural and vice versa, andone gender includes the other genders;  (b) Headings have been inserted for convenience only and shall notaffect the interpretation of this Agreement;  (c) A “person” includes natural persons, firms, companies and anyother bodies, associations or organisations;  (d) References to dates and times are to Vietnamese dates and times;

 

10 (e) References to monetary amounts are to USD;  (f) References to sections,Clauses, subclauses and schedules are references to sections, Clauses, subclauses and schedules inor to this Agreement;  (g) Any expression related to an expression defined in this Agreement shallhave a meaning corresponding to the defined expression;  (h) Any schedules to this Agreement andthe provisions and conditions contained in such schedules shall have the same effect as if set outin the body of this Agreement;  (i) References to any statute refer also to any regulation, orderand notice made under or pursuant to the statute or regulations made under the statute;  (j) References to laws, ordinances, decrees, regulations, decisions, circulars and codes refer also tolaws, ordinances, decrees, regulations, decisions, circulars and codes amending, consolidating orre-enacting those referred to;  (k) Any covenant not to do anything also constitutes an obligationnot to suffer, permit or cause that thing to be done;  (l) A right granted or reserved may beexercised from time to time and at all times;  (m) The illegality, invalidity or unenforceabilityof any provision in this Agreement shall not effect the legality, validity or enforceability of anyother provision.

 

11**PART B. JOINT VENTURE ESTABLISHMENT PROVISIONS****2.** **GENERAL OBJECTIVES** 2.1 The Parties hereby associate themselves in a joint venture to establish theEnterprise in accordance with the Investment Legislation to carry out the following objectives andall related activities upon and subject to the terms and conditions of this Agreement and theCharter: 2.1.1 To carry out the Project;  2.1.2 To carry out any other Exploration Activities asmay be contemplated in the Charter;  2.1.3 To carry on business in all products extracted orderived from the Project;  2.1.4 To carry out all other activities in accordance with VietnameseLaw which are, or may be, incidental or ancillary to the foregoing;  in accordance with good andacceptable international practices.2.2 In undertaking these objectives, the Enterprise has allthe powers of a juridical person including, without limitation, the power to borrow, providesecurity, issue guarantees, open bank accounts in accordance with regulations and to enter into andperform contracts. 2.3 The Parties shall share profits and losses in proportion to theirrespective Participating Interests. 2.4 The duration of the Joint Venture will be for the Term,unless liquidated prior to theexpiry of that period in accordance with the Investment Legislation or by agreement between theParties. 2.5 The relationship of the Parties shall be one of joint venturers. The rights, duties,obligations and responsibilities of the Parties shall be several and not joint and several.Neither this Agreement nor any activities of any Party referred to herein shall create anypartnership, association, trust or other relationship under which any one or more of the Partiesmay be liable generally for the acts or omissions of any other Party or Parties, nor should thisAgreement be considered or interpreted as constituting any Party the partner, agent orrepresentative of the other Party except when otherwise expressly provided for. In particular, butwithout limitation, no Party shall have authority to pledge the credit of the other.

 

12**3.** **ESTABLISHMENT OF THE ENTERPRISE** 3.1 The Parties hereby agree to establish the Enterprise inaccordance with Investment Legislation, as follows:     **(a) Name of Enterprise:** in English: Binh Dinh New Zealand Gold Company Limited  in Vietnamese: Công ty TNHH Vàng Bình Dinh New Zealand  Transaction name: BNG     **(b) Addresses of Enterprise:** Head office 422 Nguyen Thai Hoc St, Quy Nhon City, Binh Dinh Province, Vietnam  Production Factory Tien Thuan, Tay Son District, Binh Dinh Province  Representativeoffice 16/2 Giang Van Minh, Ba Dinh District, Hanoi     **(c) Production capacity** Nominal As determined by Feasibility Study     **(d) Product Markets**   Domestic and International     **(e) Enterprise undertaking** Mining Processing Using modern technology to maximise ore extraction,  Environmental protection Using modern technology to maximise mineral recovery   Pursuant to Vietnam & International Environmental Law3.2 The Parties agree that contemporaneous with execution of this Agreement,they will execute the Charter in order to establish the Enterprise under Vietnamese Law. 3.3 TheEnterprise shall be organised and managed in accordance with the terms of this Agreement and theCharter. **4.** **CHARTER CAPITAL AND RESPONSIBILITIES OF PARTIES** 4.1 The Initial Charter Capital ofthe Enterprise shall be TEN MILLION UNITED STATES DOLLARS_(USD10,000,000.00) contributed by theParties in proportion to their respective Participating Interests and in the manner set out below. 4.2 At the Effective Date the Participating Interests of the Parties shall be as follows:             **BIOTAN**          TWENTY FIVE PER CENT             (25%)             **KSML**              SEVENTY FIVE PER CENT            (75%)   The Parties shall continue to holdsuch Participating Interests throughout the Term except as provided for in this Agreement and theCharter. 4.3 The Initial Charter Capital will be used for Project Expenditure. If at any time theEnterprise requires the Parties to make further contributions to Charter Capital under Section13.0, the Parties will each provide their respective additional financial contribution fully and ontime. 4.4 BIOTAN’s Initial Charter Capital Contribution of TWO MILLION FIVE HUNDRED THOUSAND UNITEDSTATES DOLLARS (USD2,500,000) will be provided by BIOTAN upon the Board making a Decision to Mine.

 

134.5 BIOTAN’s Responsibilities will also include: 4.5.1 Liaison with local and central governmentto ensure co-operation and the efficient resolution of Provincial and central governmentadministrative matters to facilitate and promote the licensing and implementation the goldexploration and mining projects in Binh Dinh;  4.5.2 Using their best endeavours to expedite thegrant to the Enterprise of the Investment Certificate, the Exploration Licence and, if appropriate,the Mining Licence; and  4.5.3 Providing the Enterprise with all assistance and advice on mattersof procedure and protocol in Vietnam and Binh Dinh Province.4.6 KSML’s Initial Charter Capital Contribution of SEVEN MILLION FIVEHUNDRED THOUSAND UNITED STATES DOLLARS (USD 7,500,000) will be provided by KSML upon the Boardmaking a Decision to Mine. 4.7 Costs relating to prospecting and Exploration Activities up toDecision to Mine will be checked by both parties and audited. If KSML determines that the definedTien Thuan resources are insufficient to allow Mining Operations to proceed and the project isdiscontinued, or if the mining proves unprofitable, then the costs of prospecting and ExplorationActivities shall be born by the Foreign Party only and BIOTAN shall not be required to contributeto these costs. Such prospecting and exploration costs shall otherwise be treated as a loan to theEnterprise and repaid to KSML from future Enterprise profits, at the rate of forty percent (40%) ofannual audited after-tax profit, prior to distribution. 4.8 KSML’s responsibilities will alsoinclude: 4.8.1 Providing the Enterprise with all available geological information concerning theProject Area that it has prepared;  4.8.2 Providing the benefit of its knowledge and technicalexpertise in modern mining and exploration practices;  4.8.3 Arranging third party loans to BNG(subject to Board approval).4.9 Any Party unable to complete Capital Contributions as scheduledin this section shall inform the other Party of the reasons therefore and the measures to be takenby that Party in order to resolve the situation at least twenty (20) days in advance. 4.10 If aParty defaults in the payment of a Capital Contribution (“Diluting Party”) and if the defaultcontinues for more than thirty (30) days following notice from the other Party, the DilutingParty’s Participating Interest will upon expiry of the thirty (30) day notice period beautomatically reduced, and the Participating Interest of each Non-Diluting Party will beautomatically increased, to reflect the proportionate Capital Contributions of the Parties.

 

14**5** **TERM AND TERMINATION** 5.1 This Agreement shall commence on the Commencement Date and terminate onthe Termination Date, but this Agreement shall terminate earlier, if: 5.1.1 The InvestmentCertificate or any extension thereof expires, is terminated, cancelled or revoked;  5.1.2 Notice oftermination is given in accordance with Clauses 4.8, 6.4 and 10.5;  5.1.3 The Parties agree inwriting to the early termination of this Agreement;  5.1.4 Notice of termination is given pursuantto Clause 25.1.5.2 The parties may by agreement extend this Agreement, which extension shall besubject to approval by the relevant Vietnamese Authority. 5.3 Where this Agreement is terminatedunder Clause 5.1, other than as a result of a default by the Foreign Party, the Vietnamese Party isrequired to purchase the Participating Interest of the Foreign Party for a price agreed between theParties and, if no agreement is reached within thirty (30) days from the date of termination, thenthe price will be determined by an international accounting firm nominated by the Board, who willvalue the Participating Interests of both Parties on the basis that the Enterprise is a goingconcern and will continue to enjoy full use and benefit of its assets until the Termination Date,or as otherwise determined by the feasibility study, including any right to use land or to leaseland held by the Enterprise immediately before this Agreement was terminated. 5.4 It isacknowledged that the transfer contemplated by Clause 5.3 requires the approval of the Board. TheParties agree to ensure that their nominated Board members vote in favour of the transfer. If theBoard does not approve the transfer and the Enterprise is to be liquidated or dissolved, then theVietnamese Party will nevertheless pay the price calculated in accordance with Clause 5.3 to theForeign Party and following that payment the Vietnamese Party is fully entitled to all of thebalance upon liquidation. 5.5 Subject to Clause 5.3 or unless the Parties otherwise agree, ontermination of this Agreement in accordance with Clause 5.1, the Enterprise will be dissolved asprovided in the Charter and the Parties will take the steps required to bring about thisliquidation. 5.6 It is recognised by the Parties that dissolution of the Enterprise requires theunanimous approval of the Board. Where Clause 5.5 operates, the Parties agree to direct theirnominated members of the Board to vote in favour of the dissolution. 5.7 If for any reason neitherClause 5.3 or Clause 5.4operates, the liquidation committee referred to in the Investment Legislation **(“LiquidationCommittee”)**applies the following guidelines:

 

15 5.7.1 The physical assets of the Enterprise shall beassessed and valued at market value by an independent third party experienced in assessing thevalue of the types of assets owned or held by the Enterprise **(“market value”)**;  5.7.2 In valuingand selling physical assets, the Liquidation Committee shall use every effort to obtain the highestpossible price for those assets;  5.7.3 If an asset of the Enterprise is sold or transferred to, orretained by, a Party at a value lower than the market value assessed for that asset under Clause5.7.1, then that asset is deemed to have been sold or transferred to, or retained by, that Party atits market value for the purposes of calculating that Party’s share of the distribution of assetsof the Enterprise under this Clause 5.7.5.8 The provisions of Sections 22.0, 24.0, 26.0 and 28.0and the provisions of Clauses 5.3 to 5.7 inclusive survive the termination of this Agreement.

 

16**PART C. JOINT VENTURE PROCEDURAL PROVISIONS****6** **INVESTMENT CERTIFICATE APPLICATION** 6.1 As soon as possible after the Commencement Date, KSML will prepare aPre-Feasibility Study to support an Investment Certificate Application. The Pre-Feasibility Studyshall include, but not be limited to the following: 6.1.1 An overview of the project business planand investment parameters;  6.1.2 A summary of the prior DGMV mineral exploration results;  6.1.3 Astatement of DGMV defined resources and estimate of the future resource potential;  6.1.4 Adescription of the intended mining and processing methods;  6.1.5 A scoping study, which shallfully outline the additional work that will be required before an Application can be made for aMining Licence;  6.1.6 A conceptual financial model;  6.1.7 A summary of the financial and otherbenefits that will accrue to the Province from the intended development;  6.1.8 An EnvironmentalImpact Assessment, which shall identify and quantify any perceived environmental impacts or risks;and  6.1.9 A project risk / benefit analysis.6.2 As soon as the above Pre-Feasibility Studydocument has been completed, the Enterprise will lodge it, together with this Agreement, theCharter and such other support documentation as may be required in application to the relevantVietnamese Authority for an Investment Certificate. 6.3 In making application for the InvestmentCertificate, the Parties shall apply for all taxation benefits, concessions and other preferentialtreatment offered pursuant to the Investment Legislation. 6.4 Either party may terminate thisAgreement and Charter by notice in writing to the other Party in the event that: 6.4.1 TheInvestment Certificate is issued upon terms and conditions which are inconsistent with the Parties’application referred to above and/or with the terms and conditions of this Agreement; or  6.4.2 TheInvestment Certificate is issued upon terms and conditions which are unacceptable to the Parties;or

 

17 6.4.3 The Investment Certificate does not issue within one year from the date oflodgement of the application for an Investment Certificate with the relevant VietnameseAuthority (or such later date as the Parties may agree in writing).6.5 The Enterprise will commence the Project as soon as possible after the Effective Date.**7.** **EXPLORATION LICENCE APPLICATION**7.1 The Parties acknowledge that an application to MoNRE for an Exploration Licence over part ofthe Project Area has already been lodged by KSML on behalf of the Enterprise. The Partiesagree that this application shall be transferred to the Enterprise.7.2 The Vietnamese Party will do everything necessary to facilitate the grant of the aboveExploration Licence as soon as possible on terms acceptable to the Parties.7.3 The Enterprise may at any time apply for additional Exploration Licences and/or apply foramendments to the boundary of the above licence, in order to extend tenure over the ProjectArea or to relinquish all or any part of the tenure, as may be deemed necessary from the resultsof work in progress.**8** **COMPREHENSIVE MINING FEASIBILITY STUDY**8.1 In respect of any mineral deposit identified within the Project Area, with the prior approvalof the Enterprise Board of Management, the General Director may commission the carrying out ofa comprehensive Mining Feasibility Study of the type required to secure finance for the minedevelopment. 8.2 The comprehensive Mining Feasibility Study will include but not be limited to the following: 8.2.1 A thorough geological investigation of all or part of the Project Area andestablishmentof proven ore reserves as defined by the Australian Institute of Mining and Metallurgyas being sufficient to support a Mining Operation;  8.2.2 A thorough study of the metallurgical properties of the ore;  8.2.3 An analysis of the mining conditions, specification of suitable mining techniques andthe costing of the same;  8.2.4 Investigation into the design and cost of a suitable processing plant;  8.2.5 Site-specific investigations for the mine, processing plant and associatedinfrastructure;  8.2.6 Market research to determine the demand and forecast price of the mine product(s);  8.2.7 Investigation and costing of options for the disposal of mine waste and tailings;  8.2.8 Selecting a suitable site and costing the establishment of all infrastructure required tosupport the proposed mining operation;  8.2.9 Quantification of the parameters such as those referred to in Clause **[6.1.1]**;

 

18 8.2.10 Base line environmental studies and a full Environmental Impact Assessment,which shall include study of likely significant environmental effects resulting from theestablishment of the mine and any required supporting infrastructure; 8.2.11 Socio-economic study of the local area;  8.2.12 Investigation of available options and costs of providing suitable supplies of waterand power to the mine and plant;  8.2.13 Undertaking a thorough financial analysis of the project model based on the resultsof the preceding items with such analyses to include prospective cash flow and rates ofreturn on investment capital from mining;  8.2.14 Determination of operating parameters, such as: annual production, operating costs,mine life, etc;  8.2.15 An analysis of the feasibility of establishing Mining Operations; and  8.2.16 Quantification of capital costs and specification of probable funding resources.**9** **DECISION TO MINE** 9.1 If after completion of the Feasibility Study the General Director recommends theestablishment and development of a mine in the Project Area then such recommendation shall be submitted tothe Board for approval. 9.2 Subject to review, approval and acceptance of the Feasibility Study by the Board of theEnterprise and subject to them being satisfied that the Project will be funded, a “Decision toMine” may be made, in which case an application for a Mining Licence will be lodged withrespect to all or part of the Mining Area. 9.3 Once a Decision to Mine has been made, BNG will lodge the Feasibility Study together withthe Environmental Impact Assessment Report and any other documents as may be required, inapplication to the Government for a Mining Licence. 9.4 In making an application for a Mining Licence BNG shall apply for all benefits, concessionsand other preferential treatment offered pursuant to the Investment Legislation. 9.5 Either party may withdraw from this Agreement and transfer its shares in the Enterprise tothe other, by notice in writing to the other Party, in the event that: 9.5.1 The Mining Licence is issued upon terms and conditions which are inconsistentwith the Parties’ application and/or with the terms and conditions of this Agreement; or  9.5.2 The Mining Licence is issued upon terms and conditions which are unacceptable toeither Party; or  9.5.3 The Mining Licence does not issue within one year from the date of lodgement of theapplication (or such later date as the Parties may agree in writing).

 

199.6 For the avoidance of doubt, the provisions of Clause 9.3 shall also apply to anyMining Licence granted over the Mining Area. **10** **MINING DEVELOPMENT** 10.1 Upon grant of the Mining Licence and subject to the Board being satisfied that the projectcan or will be funded, the General Director shall immediately commission the design of the MiningFacilities. 10.2 Any decision to commence construction of the Mining Facilities shall be made by the Boardbased on the design of the Mining Facilities commissioned by the General Director as suchdesign may be amended prior to tabling with the Board of Management. 10.3 Upon the Board making a Decision to Mine, the Parties will conclude and sign a MineDevelopment Agreement, which shall include mine development clauses and provisionscommonly employed within the industry, but shall not be contrary to the provisions of thisAgreement. 10.4 Subject to the above decision to commence construction, mine development shall becommenced as soon as possible. 10.5 If the General Director determines at any time that mine development should be discontinued,then he/she shall submit a detailed recommendation setting forth the reasons for suchrecommendation to the Board for approval not to continue with the mine development. **11** **MATERIALS AND LABOUR** 11.1 The Parties shall ensure that, wherever possible or practicable the Enterprise shall utilisematerials produced or manufactured in Vietnam where such use would not be prejudicial to theProject. 11.2 The Enterprise shall wherever possible, but subject to the provisions of this Section 11.0,use the services of Vietnamese citizens as consultants, employees and contractors subject totheir experience, technical competence and costs being competitive on the internationalmarket and acceptable to the Enterprise. 11.3 The Enterprise and its sub-contractors may bring into Vietnam such expatriate individuals asin the Enterprise’s judgment are required to carry out operations efficiently. 11.4 KSML shall be entitled to carry out necessary managerial, technical and administrativeservices for BNG, and charge normal commercial rates for doing so. 11.5 Throughout the Term BNG will provide an environment conducive to the training of unskilledand skilled labour and technical and professional personnel who are Vietnamese citizens, so thatexpatriate employees of the Enterprise will be reduced to the minimum level of efficientpractical operation as soon as possible. 11.6 The Parties agree to comply where practicable with the requirements of Vietnamese Law inrelation to the terms and conditions of employment of Vietnamese citizens.

 

20**12** **ENVIRONMENTAL PROTECTION** 12.1 The Parties shall ensure that in carrying out the Project, BNG shall have regard to thesurrounding environment and shall seek to protect the natural environment to the extent towhich it is possible to do so having regard to the nature of the Project, such asrehabilitation of cultivated land.

 

21**PART D. JOINT VENTURE FINANCIAL PROVISIONS****13** **TOTAL INVESTED CAPITAL AND FINANCING** 13.1 The Total Invested Capital of the Enterprise will depend upon the eventual scope of theoperations undertaken by the Enterprise. The Total Invested Capital of the initial stage has beenestimated at approximately FIFTEEN MILLION UNITED STATES DOLLARS (USD15,000,000.00). 13.2 After the Effective Date the Parties may be called upon to contribute their Charter CapitalContributions pursuant to Clauses 4.4 and 4.6 and thereafter to provide in proportion totheirParticipating Interests, (whether by way of debt or equity or as otherwise agreed) suchfunds asmay be required to meet Expenditure, pursuant to Clauses 4.3 and 13.3. 13.3 The General Director may from time to time under authorisation from the Board (but not lessthan thirty (30) days in advance of any period requiring funds pursuant to an approvedprogramme and budget) as and when required request in writing from the Parties liable to makethe same, contribution of funds (either by way of an increase in Charter Capital Contributions,loans or otherwise as agreed by the Parties) to meet required Expenditure. The funds sorequested shall be due and payable to the Enterprise thirty (30) days after the date of the requestor such longer period as the Board may determine. 13.4 Notwithstanding the above, if the Board of the Enterprise so determines, the Enterprise mayarrange finance from a third party on terms it thinks fit in lieu of any part of the funds to beprovided by the Parties. The Parties shall remain liable to provide funding to the Enterprise inproportion to their Participating Interests for any amount required by the Enterprise to meetExpenditure, but not funded by way of such third party financing. **14** **DISTRIBUTION OF PROFITS** 14.1 Subject to Clauses 14.3 and 14.4, the after tax profit of the Enterprise (that is, the netprofit afterdeducting expenses, loan repayments and taxes, recovery of capital where allowed byVietnamese Law and setting aside any amounts for any reserve fund) may be divided each yearin proportion to each Party’s Participating Interest. The amount of such after-taxprofitsdistributed to the Parties shall be determined by the Board, which shall also determine theportion of the after-tax profit to be entered into any reserve fund. 14.2 If the profit and loss statement in any particular year results in a loss that cannot becovered byany reserve fund then the said loss shall be recorded in and entered into the profit andlossstatement and be carried forward in to the succeeding year or years but not exceeding five(5)years and the Enterprise shall be deemed not to have made any profits until such time as thelossrecorded in and entered in to the profit and loss statement has been completely covered. 14.3 With the approval of the Parties, the Board may create whether out of profits of theEnterpriseor otherwise, such reserve funds and for such purposes, as it may see fit. 14.4 Where cash flow is adequate, the Board may make distributions of profit (after properlyproviding for all anticipated expenses and taxes) on a three monthly basis.

 

22**15** **TRANSFER OF PARTICIPATING INTEREST** 15.1 Subject to the provisions of this section, and subject to the Investment Legislation and theCharter, a Party shall be free to transfer all or part of its Participating Interest toanother personor enterprise. 15.2 Any Party (the **“Assigning Party”)**wishing to transfer all or part of its ParticipatingInterest(the **“Offered Interest”)**shall first offer the same to the other Party (the **“Non-AssigningParty”)**upon such terms and conditions as it sees fit. Any such offer is revocable if theNon-Assigning Party does not agree within one (1) month after receipt of such offer to acquiretheOffered Interest upon such terms and conditions. In this case, the Assigning Party shall befreefor a period of six months thereafter to sell and transfer the Offered Interest to any thirdparty onterms and conditions which are not more favourable than those offered to the Non-AssigningParty. 15.3 The transfer by the Assigning Party to a third party (the **“Proposed Assignee”)**of the OfferedInterest shall be conditional upon the Proposed Assignee executing an Agreement with theNon-Assigning Party under which the Proposed Assignee agrees to be bound by all of the provisionsof this Agreement and to assume, observe and perform all the obligations and liabilities of theAssigning Party hereunder and under the Charter, limited only to the extent of the ParticipatingInterest received by and held by the Proposed Assignee from the Assigning Party, and otherwiseas though the Proposed Assignee was an original Party hereunder and under the Charter. Nosuch assignment shall relieve the Assigning Party of any liability arising before the transfer iseffected. 15.4 Each Party may for the purposes of financing its obligations hereunder and other costsassociated with such financing, with the consent of the other Party, mortgage or encumberall orany part of its Participating Interest and its right, title and interest hereunder providedthat suchParty who so mortgages or encumbers its interest shall ensure that such mortgage orencumbrance shall contain a Clause that on any sale held in enforcement of the same, theinterest being sold shall be first offered to the other Party to this Agreement on the termsandconditions contained herein. 15.5 If either Party transfers all or any part of its Participating Interest to a third party, theAssigningParty may also assign to such third party the same proportion of any debts owed to it by theEnterprise and/or by the Non-Assigning Party. Such assignment of indebtedness may beeffected by the Assigning Party serving a notice of assignment on the debtor (namely, theEnterprise and/or the Non-Assigning Party) and, from the time such notice is properly served,the debtor will thereafter owe the relevant proportion of such debts to the third party. 15.6 At the expiration of ten (10) years from the end of the period in which the Enterprise makesprofits for two (2) consecutive years (“First Profit Making Period”), the Vietnamese Partymayacquire from the Foreign Party a proportion of the Foreign Party’s Participating Interest intheEnterprise so that upon completion of that acquisition the Participating Interests of thePartiesfor all of the purposes of this Agreement will be:     **Vietnamese Party:**  **30****%****Foreign Party:**  **70****%**

 

2315.7 At the expiration of twenty (20) years from the end of the First Profit MakingPeriod, theVietnamese Party may acquire from the Foreign Party a further proportion of the ForeignParty’s Participating Interest in the Enterprise so that upon completion of that acquisition theParticipating Interests of the Parties for all of the purposes of this Agreement will be:     **Vietnamese Party**  **49****%****Foreign Party**  **51****%**15.8 Any acquisition under Clause 15.6, and/or 15.7 will be made by the Vietnamese Party paying tothe Foreign Party the fair market value of the interest being acquired. The fair marketvalueshall be agreed between the Parties and if the Parties do not agree that value within two(2)months from the date on which the Vietnamese Party became entitled to acquire that interest,the fair market value shall be assessed by Ernst & Young (or its successor) and thatassessmentwill be final and binding on the Parties. Upon payment of the agreed or assessed acquisitionprice by the Vietnamese Party and the Foreign Party, the Parties will execute an assignmentagreement and register the assignment with the relevant Vietnamese Authority. 15.9 If the Vietnamese Party fails to proceed with an acquisition under Clause 15.6 within three(3)months from the date on which the Vietnamese Party became entitled to acquire the relevantinterest, the Vietnamese Party will be regarded as having waived the right to make thatacquisition, but that does not prevent the Vietnamese Party from exercising its right to make anacquisition under Clause 15.7. However the acquisition under Clause 15.7 must be made withinthree (3) months from the date on which the Vietnamese Party became entitled under Clause15.7 to make that acquisition, otherwise it will be regarded as having waived the right to makethat acquisition. **16** **ACCOUNTING PRINCIPLES** 16.1 Books of account shall be maintained by the Enterprise and shall be based on internationalaccounting principles and standards approved by the Board and recognised by the MOF. 16.2 The Board may apply to the MOF for adoption of a financial year which corresponds to thefinancial year of one or both of the Parties and if the MOF approves such application, thefinancial year of the Enterprise shall be the financial year so approved. 16.3 At the end of each financial year of the Enterprise, the Board shall cause to be drawn up aset offinancial statements for the Enterprise (including a balance sheet and profit and lossstatement)and shall also prepare a report of the Board and any other relevant financial statements.Theaforesaid financial statements and report of the Board shall be prepared in accordance withallrelevant provisions of the Investment Legislation and shall be approved by a resolution oftheBoard and signed by the Chairman. 16.4 After the financial statements and the report of the General Director have been approved bytheBoard and signed by the Chairman, they shall be submitted to the auditor of the Enterpriseapproved from time to time by the MOF to audit the accounts. 16.5 The approved statements of the Enterprise and the report of the Board shall be submitted totherelevant Vietnamese Authorities within three (3) months after the end of the Enterprise’s

 

24  financial year and a copy of such statements, authenticated by the Chairman, shall also beprovided to each Party.**17** **BANKING AND INSURANCE** 17.1 The Enterprise shall maintain bank accounts in USD and Vietnamese dong with a VietnameseBank, or such other bank as the Board determines in accordance with the law. Signatories to allbank accounts shall be determined by the Board. 17.2 The insurance cover including social insurance required by the Vietnamese Law for theVietnamese employees of the Enterprise shall be arranged through insurance companies ororganization in Vietnam or such other international insurance company as the Enterprise maynominate from time to time. 17.3 The Enterprise shall obtain appropriate insurance cover through an insurance company orcompanies operating in Vietnam or such other international insurance companies as theEnterprise may nominate from time to time for personal accident covering employees,consultants, contractors and third parties, loss or damage to property of the Enterprise either intransit or on site, and general public liability insurance. **18** **SALE OF PRODUCT** 18.1 The Enterprise reserves the right to sell gold bullion, bar or other gold product or any otherproduct of Mining Operations through its nominated agent in such places as the Enterprise mayfrom time to time nominate or to distribute the product to the Parties in proportion with theirParticipating Interest. 18.2 Revenue from the sale of gold will be deposited in the name of the Enterprise in the USDaccount (or such other currency account as the Parties may from time to time agree) maintainedwith such Bank either within or outside Vietnam as the Board determines pursuant to theregulations of the State Bank of Vietnam. 18.3 Funds sufficient to cover the following expenditures will be remitted to the Enterprise’saccounts in Vietnam: 18.3.1 Operating costs of the Enterprise required to be paid in Vietnam;  18.3.2 All taxes and fees regulated by Vietnamese Laws;  18.3.3 Other authorised payments to the Government;  18.3.4 Profits from the operation due to the Vietnamese Party;  18.3.5 Any reserve fund requirements; and  18.3.6 Any other amounts required to be paid in Vietnam, including land rents.18.4 Profit due to either Party and repayments of any loans made to the Enterprise, shall beremittedto that Party’s own account at a bank of its choosing on the signature of a duly authorisedsignatory on behalf of that Party.

 

25**PART E. JOINT VENTURE REGULATORY PROVISIONS****19** **BOARD OF MEMBERS** 19.1 The Enterprise shall be managed by a board consisting of members agreed by the parties andpermitted at law. The term of office of the Board is three (3) years. The Board shall beappointed by the Parties at the Effective Date. The voting rights of each party shall reflectthe respective Participating Interests of the Parties. 19.2 The Party that appoints a particular member to the Board shall be entitled to remove andreplacesuch member at any time by notice in writing to the Board. 19.3 Members of the Board may be paid all travelling, hotel and other expenses properly incurredbythem in attending and returning from meetings of the Board or in connection with the businessof the Enterprise. 19.4 The Chairman of the Board shall be one of the members of the Board who is unanimouslynominated to that position by the Parties. Such person shall cease to be Chairman if the Partiesunanimously agree to terminate his/her appointment or if such person ceases for any reason tobe a member of the Board. The first Chairman shall be a representative of KSML. 19.5 The Board shall be responsible for the overall management of the Enterprise. 19.6 Except in relation to the matters required by the Investment Legislation, decisions of theBoardshall be valid and binding on the Enterprise if they are approved by a simple majority of votescast by the members at a meeting of the Board. Each Party’s representative shall have thenumber of votes equal to the percentage of its Participating Interest. 19.7 Amendments to the stipulations contained in the Charter including amendments to the name,seat and objectives of the Enterprise, increases in Legal Capital, and the liquidation oftheEnterprise before the Termination Date (or any extension of it) may only be effected byunanimous agreement of the Parties and will not take effect prior to the approval of therelevantVietnamese Authority being granted. 19.8 In the event that the Board determines that the funding requirements of the Enterprise shouldbemet by way of an increase in the Legal Capital and such increase is approved by the Partiesthenunless otherwise agreed, the Parties shall be liable to contribute the increase in LegalCapital. **20** **MEETINGS OF THE BOARD OF MEMBERS** 20.1 The Board shall meet as often as business requires, but at least once a year, and suchmeetingshall be convened by the Chairman. The meetings of the Board shall be held at the place wherethe Enterprise has its seat or such other place or places as are mutually agreed by all the Parties. 20.2 Meetings of the Board will be chaired by the Chairman.

 

2620.3 A meeting of the Board shall be the presence in person of both members or theirrepresentatives. A member of the Board shall be entitled to appoint a representative toattend atany particular meeting of the Board and to vote on that member’s behalf. 20.4 Notice of each Board Meeting shall be given by the Chairman in writing to all the Parties whoshall be responsible for providing notice to their representative and shall be accompanied by anagenda. Such notice must be given at least twenty-one (21) days prior to the date of theproposed meeting of the Board unless otherwise agreed in writing by the Parties. Matters notincluded in the agenda for a meeting shall not be decided at the meeting to which the agendaapplies unless the Parties agree. 20.5 All proceedings of the Board shall be fully and accurately minuted in both English andVietnamese and the minutes kept in a minute book under the charge of the Chairman. TheBoard shall determine the governing language of the minutes of Board meetings and shalldetermine the language used for reporting of the business. 20.6 All resolutions or decisions of the Board shall be made pursuant to the Charter and shall bebinding on the Parties. Any resolution or decision properly passed by the Board becomeseffective immediately after it has been passed. 20.7 Typed copies of all minutes covering all Board meetings shall be submitted to all Parties forapproval before inclusion in the minute book. Within seven (7) days of receipt of thedraftminutes each Party shall promptly notify the chairman and the other Party of any changes itbelieves should be made. Failure to notify within fourteen (14) days shall be deemedacceptance of the minutes. Minutes will be presented to the next meeting of the Board forverification. When the meeting is satisfied as to the accuracy of the minutes the chairmanand arepresentative of each Party shall sign them as a true and correct record, and forward onecopyto each of the Parties. 20.8 The Board may also take decisions without holding a meeting. A resolution in writing signedby all the members of the Board for the time being shall be as valid as if it had been passedunanimously at a meeting of the Board duly convened and held. Any such resolution mayconsist of several documents in like form, each signed by either or both members of the Board.Any such document purporting to have been sent by a member of the Board by facsimile, orother electronic means of communication shall be deemed to be signed by such members. 20.9 The members of the Board may meet by means of a telephone meeting: 20.9.1 “Telephone meeting” means the contemporaneous linking together by telephone ofmembers of the Board (whether or not either or both of those persons is outsideVietnam);  20.9.2 “Telephone” means and includes any electronic means of communication.20.10 A minute of the proceedings at a telephone meeting shall be conclusive evidence of theproceedings and the regularity of the meeting as certified in accordance with Clause 20.7.

 

27**21** **GENERAL MANAGEMENT OF THE ENTERPRISE** 21.1 The Board shall be responsible for appointing the General Director of the Enterprise and one(1)First Deputy General Director, and shall ensure that the conduct of all activities on the Projectare conducted in accordance with good and acceptable international and Vietnam practice. 21.2 The General Director shall be appointed from persons nominated by the Foreign Party. TheFirst Deputy General Director shall be appointed from persons nominated by the VietnameseParty. All nominees are to be fully conversant with the English language and have recognisedtechnical or commercial qualifications relevant to the activities of the Enterprise. The FirstDeputy General Director shall be a Vietnamese citizen. 21.3 The General Director and the First Deputy General Director shall be responsible for themanagement and conduct of the day to day business of the Enterprise. The Board shalldetermine the respective responsibilities and authorities of the General Director and theFirstDeputy General Director both of whom shall be responsible to the Board for the operations ofthe Enterprise. 21.4 The General Director and the First Deputy General Director may, but need not, be members ofthe Board. If the General Director is not a member of the Board, he/she shall nevertheless beentitled to attend meetings of the Board but shall have no right to vote on any resolution put atsuch meeting. 21.5 The Chairman of the Board and the General Director shall have the authority to represent theEnterprise before Vietnamese law courts and Vietnamese government authorities. 21.6 The General Director and the First Deputy General Director shall each be entitled to haveauthority to represent the Enterprise in relation to all matters falling within the scope of theduties so delegated to each of them by the Board. 21.7 All annual work programmes, business plans and budgets in respect of the Project shall beprepared by the General Director and shall be approved by the Board. 21.8 All work programmes shall include but not be limited to the following: 21.8.1 A description of the aims and objectives of the programme;  21.8.2 A detailed description of the work to be performed under the programme includingmapping, surveys, sampling, drilling, assays, engineering and metallurgical studies andother detailed geotechnical activities to be undertaken;  21.8.3 To the extent practicable identification of targets and areas which are to be subject todrilling or other detailed geotechnical activity;  21.8.4 A description of the support services which are likely to be required to carry out theprogramme;  21.8.5 Estimates of the number of expatriates and Vietnamese citizens which will need to beengaged on the programme and of the costs of such employees;  21.8.6 Estimates of the cost of contractors, on an item by item basis, required to carry outtheprogramme;

 

28 21.8.7 An estimate of the capital expenditure and associated cost, including the costof thefinance likely to be required in connection with the programme;  21.8.8 A breakdown of all fees, rental and other similar charges payable pursuant to anyVietnamese Law during the programme period;  21.8.9 A breakdown of estimated costs of office and other overhead expenses to be allocatedtothe programme and budget;  21.8.10 A contingency sum to cover miscellaneous items and overruns;21.9 All work programmes, business plans and budgets shall be prepared and calculated on afinancial year basis unless otherwise mutually agreed by the Parties (who shall instructtheirmembers of the Board concerning the matter) except for the first such work programme,business plan and budget which will cover the period from the Effective Date until the endofthe current financial year. 21.10 The Parties agree that any work programme, business plan and budget may be amended fromtime to time by the General Director, by the revision, addition or deletion of any work,expenditure or commitment not previously included or made, or by the addition of any worknotpreviously included, provided that no such revision, addition or deletion shall be made ifitwould otherwise result in the Enterprise being in default of any obligations underVietnameseLaw. Any material amendment of work programmes and budgets will require the approval ofthe Board. 21.11 In addition to his/her other responsibilities the General Director shall also be responsiblefor thefollowing matters: 21.11.1 The preparation and implementation of work programmes, business plans andbudgets;  21.11.2 Arranging for the provision of the administration, technical, accommodation andother requirements of the Enterprise necessary to implement work programmes andbusiness plans;  21.11.3 Engaging and dismissing staff, labour and contractors required to administer theEnterprise and implement work programmes and business plans;  21.11.4 Undertaking negotiations with the appropriate local, regional and other authoritieswherever necessary;  21.11.5 Determining the funding requirements of the Enterprise (if any) and the means offinancing such requirements;

 

29 21.11.6 Ensuring that the Enterprise- (a) Complies with its statutory obligations relating to its operations,  (b) Prepares and lodges all reports required by Vietnamese Law,  (c) Keeps true and correct books, accounts and records of its operations inaccordance with Vietnamese Law,  (d) Pays all costs and expenses incurred in carrying out work programmesandbusiness plans,  (e) Furnishes to the Parties a detailed quarterly report of its operationand thedevelopment of the Project, and  (f) provides and maintains in force all insurances required by Vietnamese Lawor regulations and any additional insurance which it shall reasonably requireto be effected to protect the Enterprise’s assets, activities, employees andcontractors.

 

30**GENERAL****22** **CONFIDENTIALITY**22.1 Unless otherwise agreed to by the Parties, all information obtained in relation to thisAgreement, the Project or Mining Operations shall be kept confidential and shall not bedisclosed by the Parties to any third parties other than: 22.1.1 An employee of the disclosing Party participating in the Project and then only to theextent necessary for such person to properly carry out his/her duties; 22.1.2 Any Party to whom disclosure is required by any applicable law or regulation or therules of any Stock Exchange that may require disclosure; 22.1.3 A financial institution in connection with any financing sought to be arranged by thedisclosing Party for purposes directly related to this Agreement; 22.1.4 Independent consultants and contractors to the Parties whose duties and relations tothe Joint Venture reasonably require such disclosure; 22.1.5 Independent accountants or legal counsel engaged by a Party for the purpose only ofenabling such accountants or legal counsel to give appropriate advice to the Party inrespect of matters arising under this Agreement or any agreement contemplated by thisAgreement; 22.1.6 Any recognised merchant or investment banking firm engaged in giving advice to thedisclosing Party in connection with this Agreement; 22.1.7 Any prospective purchaser, transferee or assignee of the whole or any part of theParticipating Interest of the disclosing Party and any accountants, legal advisers orfinancial institutions retained by such third party, subject to each of those personsentering into a form of confidentiality agreement in a form reasonably acceptable tothe non-disclosing Party.22.2 Each Party agrees not to exploit commercial or trade secrets and other confidentialinformation divulged by the other Party under this Agreement and not to disclose the same toany corporation, firm or person whatsoever except to directors, officers and employees of theEnterprise where that information is required in the normal course of their duties. 22.3 Each Party (at the request of the other Party) and the Enterprise is to obtain individualundertakings from its directors, officers and other employees to respect the secrecy of tradesecrets and other confidential information disclosed to them as contemplated by Clause 22.2. **23** **FORCE MAJEURE** 23.1 The obligations of each Party (other than underSections 22.0, 24.0 and 27.0) shall besuspended and the time of expenditure of monies payable by either Party shall be extended tothe extent that such Party is hindered or prevented from performance or expenditure by theForce Majeure event.

 

3123.2 No Party shall be entitled to the benefit of this section or any part hereof if theForce Majeure event is caused by or results from lack of funds (unless the lack of funds iscaused by government intervention or regulation) or by negligence, default or omission ofthe Party claiming suspension. 23.3 If an event of Force Majeure causes a suspension or extension, the Party affected shall givenotice thereof as soon as reasonably practicable to the other Party stating the date, extentand nature thereof. A Party whose obligations or expenditure have been suspended or extendedshall resume performance or expenditure as soon as reasonably possible after the removal ofthe event of Force Majeure and shall so notify the other Party. **24** **DISPUTES AND ARBITRATION** 24.1 Any dispute arising out of or in connection with this Agreement or its performance, includingthe existence and validity of this Agreement and this section, and the scope, meaning,construction, interpretation or application of this Agreement **(“Dispute”),**shall to thefullest extent possible be settled amicably by negotiation and discussion between the Parties. 24.2 A Dispute which is not able to be settled by amicable agreement and which is between theParties will be finally settled by arbitration under the UNCITRAL arbitration rules containedin resolution 3l/98 adopted by the United Nations General Assembly on 15 December l976 andentitled “Arbitration Rules of the United Nations Commission on International Trade Law” aspresently in force. 24.3 The arbitration will be before three arbitrators. The Vietnamese Party and the Foreign Partywill each nominate one arbitrator and the two (2) nominees will agree on the third arbitrator.If the Vietnamese Party or the Foreign Party fails to nominate its arbitrator within fourteen(14) days of being required to do so, or if the two nominees cannot agree on the thirdarbitrator within twenty eight (28) days, then either the Vietnamese Party or the ForeignParty may request the chairman for the time being of the Singapore International ArbitrationCentre to nominate the required arbitrator. 24.4 The place of arbitration will be Singapore unless otherwise agreed. 24.5 The arbitrators are not bound by strict rules of law where they consider the application ofthose rules of law to particular matters to be inconsistent with the spirit of this Agreementand the underlying intent of the Parties and, as to those matters, their conclusions willreflect their judgement of the correct interpretation of all relevant terms of this Agreementand the correct and just enforcement of this Agreement in accordance with those terms. Thearbitrators will not amend or modify this Agreement. The award rendered will apportion thecosts of the arbitration. 24.6 Any other Dispute, not of the nature referred to above, is to be referred to the EconomicCourt of Vietnam if it cannot be settled amicably by negotiation and discussion. 24.7 An award in arbitral proceedings in accordance with this section 24.0 **(“arbitrator’s award”)**will be final and binding on the Parties and judgment may be entered and executed in any courthaving jurisdiction over either of the Parties or the assets of either of the Parties. TheParties undertake to comply with an arbitrator’s award. 24.8 During the process of arbitration, this Agreement shall continue to be performed except andinsofar as that part which remains in dispute and is in the process of being arbitrated. **25** **DEFAULT**

 

3225.1 If any Party (the “Defaulting Party”): 25.1.1 Fails to contribute, whether by way of debt or equity, in proportion to itsParticipating Interest, its share of any funds required to meet Expenditure pursuant toClause 13.2; or  25.1.2 Defaults in any other substantial obligation to be performed by it under thisAgreement and such default is not rectified within sixty (60) days of the other Party(the “Non-Defaulting Party”) giving notice of the default to the Defaulting Party,  then the Non-Defaulting Party can either: 25.1.3 Terminate this Agreement by giving notice of termination to the Defaulting Partyfollowing the expiration of such sixty (60) day period; or  25.1.4 Serve a notice on the Defaulting Party invoking Clause 25.2.25.2 Where a notice invoking this Clause is served on a Party in accordance with Clause 25.1, theParticipating Interest of each Party shall be recalculated as being that percentage which thedebt and equity actually contributed by such Party bears to the total debt and equitycontributed by all the Parties and the Parties respective Participating Interests shall beadjusted by the transfer from one Party to the other of such amount of Legal Capital as isnecessary to reflect the new Participating Interests of the Parties. 25.3 A default shall be deemed to have been rectified if Clause 25.2 has been applied in relationto such default and an assignment of Legal Capital has been effected in accordance with thatClause. 25.4 The Defaulting Party IRREVOCABLY APPOINTS the Non-Defaulting Party to be its attorneyand in its name and on its behalf to execute all transfers, consents, notices and otherdocuments and do all things necessary for the purpose of giving effect to Clause 25.2. 25.5 The Defaulting Party indemnifies and holds harmless the Non-Defaulting Party against alllosses, claims, damages (including loss of profit), expenses (including legal costs) and allother costs incurred or suffered by the Non-Defaulting Party, in any way and at any timearising out of the occurrence of the events specified in Clause 5.1.4 or Clause 25.1, or thetermination of this Agreement pursuant to such Clauses and the exercise of any of the rightsand remedies of the Non-Defaulting Party under this Agreement. **26** **REPRESENTATIONS AND WARRANTIES**

 

3326.1 The Parties enter into this Agreement in the utmost good faith, each undertaking to actin all respects in connection with the performance of this Agreement in a positive, fair andreasonable way towards the others. 26.2 The Parties will use their best endeavours to observe, maintain and carry out the provisionsof this Agreement, and to ensure that their respective appointees shall exercise their rightsin such manner that the provisions of this Agreement are observed, maintained and carried out. 26.3 Each of the Parties represents and warrants that: 26.3.1 It has the capacity to enter into and perform under this Agreement and all thetransactions and agreements contemplated herein, and that all corporate and otheractions required to authorise it to do the same have been or will be properly taken;  26.3.2 It will not breach any other agreement or arrangement by entering into or performingthis Agreement, and this Agreement when signed will have been duly executed by it andshall be valid and binding upon it in accordance with its terms;  26.3.3 It is able to provide its Legal Capital Contribution in the manner and form set outin this Agreement and that it is or will be in a position to perform all of itsobligations under this Agreement.**27** **NOTICES** 27.1 All notices, consents, requests and other communications (collectively **“Notices”**) authorisedor required to be given or made pursuant to this Agreement by a Party shall be given or madein writing signed by an authorised representative of such Party delivered or mailed byregistered or certified mail or sent by fax addressed in accordance with the details set outfor each Party in this Agreement. 27.2 Any such Notice shall be deemed to have been properly served and received by the intendedrecipient: 27.2.1 In the case of service by delivery or registered or certified mail, upon delivery;  27.2.2 In the case of service by fax, upon the sender receiving from the intended recipientfax machine acknowledgment of legible receipt.27.3 Any Party may change its address for the receipt of Notices at any time by giving writtennotice of such change to the other Party to this Agreement in accordance with the provisionsof this section.

 

34**28** **MISCELLANEOUS** 28.1 The failure of a Party to insist on strict performance of any provisions of this Agreement orto exercise any right, power or remedy upon a breach hereof shall not constitute a waiver ofany provision of this Agreement or limit the Parties rights thereafter to enforce anyprovision or exercise any right, power or remedy. 28.2 This Agreement may be amended and supplemented in accordance with a resolution of the Boardof Members. However no amendments to this Agreement shall be binding unless in writing, signedby each Party, and if required to be by Vietnamese Law, approved by the relevant VietnameseAuthority. 28.3 Eight (8) copies of this Agreement shall be executed in Vietnamese and eight (8) copies inEnglish, each of which shall be considered equally authentic. 28.4 This Agreement contains the entire understanding of the Parties relating to the Joint Ventureand there are no promises, terms, conditions or obligations, oral or written, express orimplied, other than those contained in this Agreement. 28.5 This Agreement shall be governed and construed in accordance with the provisions ofVietnamese Law and the Investment Certificate. 28.6 Each Party agrees to take such actions and execute such additional instruments as may bereasonably necessary to implement and carry out the intent and purposes of this Agreement. 28.7 This Agreement shall benefit and be binding upon the Parties and their respective successorsand personal representatives and any permitted assignees or transferees of their rights, andreferences to the Parties shall be construed accordingly. 28.8 Where there is inconsistency between the terms of the Charter and the terms of this Agreementthe terms of this Agreement will prevail.

 

35       **SIGNED**for and on behalf of (Biotan Stamp)  **BIOTAN by**MR. NGUYEN VAN QUA: /s/ Mr. Nguyen Van Qua             Mr. Nguyen Van Qua (Chairman)      Biotan Mineral Joint Stock Company         Witness: /s/ NGUYEN THI XUAN TRANG             NGUYEN THI XUAN TRANG           Occupation: THE VICE DIRECTOR OF BIOTAN           Address: 28 DONG DA, QUY NHON CITY, BINH DINH PROVINCE         **SIGNED** for and on behalf of**KSML**by **MR RODNEY HUGH MURFITT:**               (Common Seal Stamp)      /s/ Mr Rodney Hugh Murfitt             Mr Rodney Hugh Murfitt (Director)****