##### 



Explosives Services
Contract
 Lihir Gold Limited
 dnx Papua New Guinea Limited




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CONTENTS
 PARTICULARS
    
    
    11. INTERPRETATION
    
    
    11.1 Definitions
    
    
    11.2 Rules for interpreting this Contract
    
    
    41.3 Business Days
    
    
    51.4 Multiple parties
    
    
    51.5 Agreement comprises
    
    
    51.6 Prior agreements
    
    
    52. NATURE OF RELATIONSHIP
    
    
    52.1 Independent contractor
    
    
    52.2 No authority
    
    
    63. REPRESENTATIVES
    
    
    63.1 The Principals Representative
    
    
    63.2 Service Contractors Representative
    
    
    64. SCOPE OF SERVICES
    
    
    74.1 Scope of the Services
    
    
    74.2 Term for Services
    
    
    74.3 Standard of Services
    
    
    74.4 Acknowledgment by Service Contractor
    
    
    84.5 Exclusivity
    
    
    84.6 Service Contractor to provide all things required for performance
    
    
    84.7 Security of premises
    
    
    84.8 Non-solicitation
    
    
    85. VARIATIONS
    
    
    85.1 Direction for a Variation
    
    
    85.2 Valuation
    
    
    96. TIME
    
    
    106.1 Performance of Services
    
    
    106.2 Blasting Services Program
    
    
    106.3 Suspension
    
    
    107. THE SERVICES
    
    
    117.1 Service Contractors main obligations
    
    
    117.2 Compliance with Law
    
    
    128. WARRANTIES AND ACKNOWLEDGMENTS
    
    
    128.1 Warranties as to capacity
    
    
    128.2 Warranties as to the Services
    
    
    138.3 Manufacturers and other warranties for the Explosives
    
    
    148.4 Acknowledgments
    
    
    149. SERVICES-RELATED OBLIGATIONS
    
    
    149.1 Blasting Services Execution Plan
    
    
    149.2 Change in Law
    
    
    159.3 Quality management and qualitative non-performance
    
    
    159.4 Explosives Performance Standards
    
    
    16




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9.5 Removal of materials and Constructional Plant from the Mine
    
    
    169.6 Industrial relations
    
    
    1610. PAYMENT
    
    
    1610.1 The Principals payment obligations
    
    
    1610.2 Payment
    
    
    1710.3 Set off
    
    
    1810.4 Final Payment Claim
    
    
    1810.5 Final Payment Determination
    
    
    1810.6 Failure to submit claim
    
    
    1910.7 Fixed Contract Price
    
    
    1910.8 Rise and fall
    
    
    1910.9 Payment for Plant and Materials prior to Delivery
    
    
    1910.10 Taxes
    
    
    1910.11 Liability for employment related taxes and costs
    
    
    1911. GOODS & SERVICES TAX
    
    
    2011.1 Application of clause
    
    
    2011.2 GST payable
    
    
    2011.3 Tax Invoice
    
    
    2011.4 Particulars of GST
    
    
    2011.5 Adjustment Event
    
    
    2011.6 Indemnities
    
    
    2012. THE MINE
    
    
    2112.1 Access to Mine
    
    
    2112.2 Operation of Existing Plant and hours of work
    
    
    2112.3 Work Hours
    
    
    2112.4 Access for the Principal, the Principals Representative and others
and Mine security
    
    
    2112.5 Mine part of Operation of the Principal
    
    
    2212.6 Safety
    
    
    2312.7 Induction Costs
    
    
    2312.8 Separate Contractors
    
    
    2312.9 Environmental obligations
    
    
    2412.10 Principal-Supplied Items
    
    
    2413. PERSONNEL AND SUBCONTRACTING
    
    
    2413.1 Personnel
    
    
    2413.2 Induction and training costs
    
    
    2513.3 Subcontracting
    
    
    2614. MEETING AND REPORTING OBLIGATIONS
    
    
    2714.1 Business Review and Development Group (BRAD)
    
    
    2714.2 Reporting obligations
    
    
    2714.3 Records on Mine
    
    
    2815. RELEASES AND INDEMNITIES
    
    
    2915.1 Release
    
    
    2915.2 Indemnity by the Service Contractor
    
    
    2915.3 Indemnity not subordinate
    
    
    2915.4 Indemnity by the Principal
    
    
    2915.5 No indirect or Consequential Loss
    
    
    29
 ii.




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16. RISK OF LOSS OR DAMAGE AND INSURANCE
    
    
    3016.1 Responsibility for care of Explosives and Principal Supplied Items
    
    
    3016.2 Service Contractors insurance
    
    
    3016.3 Protection of people and property
    
    
    3016.4 Subcontractors
    
    
    3016.5 Notification
    
    
    3116.6 Extension to the Principal
    
    
    3116.7 Evidence required
    
    
    3117. FORCE MAJEURE
    
    
    3117.1 Notice and suspension of obligations
    
    
    3117.2 Effort to overcome
    
    
    3117.3 Alternative supply
    
    
    3117.4 Termination
    
    
    3218. DEFAULT AND TERMINATION
    
    
    3218.1 The Principals remedy notice
    
    
    3218.2 Termination for insolvency
    
    
    3318.3 Consequence of termination under clause 18.1(c) and clause 18.2
    
    
    3318.4 Change in control of Service Contractor
    
    
    3319. DISPUTE RESOLUTION
    
    
    3319.1 Procedure for resolving disputes
    
    
    3319.2 Dispute resolution not to delay execution of the Services
    
    
    3420. MEDIA RELEASES AND CONFIDENTIALITY
    
    
    3420.1 Media release
    
    
    3420.2 Confidentiality
    
    
    3420.3 Reproduction and return Documentation
    
    
    3421. NOTICES
    
    
    3521.1 How to give a notice
    
    
    3521.2 When a notice is given
    
    
    3521.3 Address for notices
    
    
    3522. AMENDMENT AND ASSIGNMENT
    
    
    3522.1 Amendment
    
    
    3522.2 Assignment
    
    
    3523. GENERAL
    
    
    3523.1 Governing law
    
    
    3523.2 Liability for expenses
    
    
    3623.3 Giving effect to this Contract
    
    
    3623.4 Parent Company Guarantee
    
    
    3623.5 Waiver of rights
    
    
    3623.6 Operation of this Contract
    
    
    3623.7 Operation of indemnities
    
    
    3623.8 Consents
    
    
    3723.9 Inconsistency with other documents
    
    
    3723.10 Counterparts
    
    
    3723.11 Attorneys
    
    
    37
 iii




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Schedules 


1 ADDITIONAL CONDITIONS
    
    
    382 SCOPE OF WORK
    
    
    413 DRAWINGS AND SPECIFICATIONS
    
    
    524 PROGRAM OF WORKS
    
    
    535 CONTRACT PRICE
    
    
    566 DELAY COSTS AND DAYWORKS RATES
    
    
    577 PRINCIPAL SUPPLIED ITEMS
    
    
    588 FORM OF PARENT COMPANY GUARANTEE
    
    
    599 TRAINING, EMPLOYMENT AND COMMUNITY CONDITIONS
    
    
    6110 EQUIPMENT LIST
    
    
    62




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EXPLOSIVES SERVICES CONTRACT
 PARTICULARSDateParties
    
    The Principal and Service ContractorPrincipal
    
    Name:
    
    Lihir Gold Limited (incorporated in Papua New Guinea)ARBN:
    
    069 803 998Address:
    
    Putput, Lihir Island, New Ireland Province, PNGPostal Address:
    
    Level 7, Pacific Place, Corner of Musgrave Street
and Champion Parade, Port Moresby, National Capital District, PNGFax:
    
    (+675) 986 4018Principals
Representative:
    
    David McMahon or any other person authorised by the
Principal including an employee of Lihir Services
Australia Pty Ltd being the Principals drill and
blast superintendent
(or a replacement appointed under clause 3.1)Service 
Contractor
    
    Name:
    
    dnx Papua New Guinea Limited (incorporated in Papua
New Guinea, company number 1-55520)Registered Address:
    
    c/o Level 12, Pacific Place, Corner of Musgrave Street
and Champion Parade, Port Moresby, National Capital District, PNGPostal Address:
    
    Level 1, 100 Eagle Street, Brisbane QLD 4000, AustraliaFax:
    
    +61 7 (3026 3801Service
Contractors 

Representative:
    
    Gary Seebeck (or a replacement appointed under clause
3.2)Services
(clause 4.1)
    
    The supply of services which the Service Contractor must
provide under this Contract and which are described in more
detail in schedule 2.Term
(clause 4.2)
    
    How many years from 
the

Commencement 
Date?Term means the expiry of the above period, or such longer
period if adjusted in accordance with clause 4.2 or if the
Contract is terminated, the period to the date of termination
 1.




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Quality Assurance System
(clause 4.3 and definition of Quality Plan)
    
    ISO 9001:2000Commencement Date (clause 6.1)
    
    means, subject to additional
condition 6, the actual date on
which the Service Contractor
commences providing the Services
pursuant to this Contract.Frequency for Updating Blasting Services Program
(clause 6.2)
    
    WeeklyPrincipal Approvals
(clause 7.2)
    
    Real property mining related approvals or permits, for
example special mining lease and other tenements.
All ancillary approvals and licences as may be
required to be obtained by the Principal as holder of
the real property mining related approvals to allow
for the Services to be provided by the Service
Contractor.Frequency for Updating Blasting Services Execution Plan
(clause 9.1)
    
    MonthlyPrincipal Supplied Items (clause 12 and schedule 8)
    
    Refer Schedule 8.Must the Service Contractor ensure continuous operation (clause
12.2(b)(i))
    
    YesWorking Hours
(clause 12.3(a))
    
    Monday to Sunday 5:30am to 5:30pm (including Public Holidays)Insurance
(clause 16.2)
    
    Public liability:               US $50,000,000.00
 2.




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Executive for referring disputes (clause 19.1)
    
    Principal:Position:
    
    Mine ManagerService Contractor:Position:
    
    Regional ManagerReview Date
(schedule 6)
    
    1 January 2008 and annually thereafterParent Company Guarantee
    
    The Service Contractor is required
to provide a parent company
guarantee in accordance with
clause 23.4.Mine
    
    The whole of the area occupied by the Principal for operation of the
Mine and associated facilities, including the special mining lease
and all mining easements, leases for mining purposes, exploration
licenses and agricultural leases. For the avoidance of doubt, the
Principal Supplied Items are part of the Mine.
 3.




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GENERAL TERMS AND CONDITIONS
 1.
    
    INTERPRETATION1.1
    
    DefinitionsTerms defined in the Particulars have the meanings given in the Particulars.The following definitions apply in this Contract.Authorityis any:
 (a)
    
    government department;(b)
    
    local government;(c)
    
    government or statutory authority; or(d)
    
    any other person under a Law,
  Blasting Services Execution Plan
 Blasting Services Program
 Business Review & Development Group or BRAD
 Business Day
 Change in Law
 Companies Act Companies Act 1997
 Completion
 (a)
    
    the Principals Representative is satisfied in his or her absolute discretion
that the Services are complete;(b)
    
    all commissioning, certification and testing required by this Contract to be
carried out and passed has been carried out and passed;(c)
    
    all information required to be provided under this Contract which, in the
opinion of the Principals Representative, is essential for the use, operation and
maintenance of the Services, including work plans and related documentation (including
a complete set of specifications prepared by the Service Contractor), all operations
and maintenance manuals, test data, instruction books, and equipment asset records and
all warranties has been supplied to the Principals Representative; and(d)
    
    all software licences required for the use, operation and maintenance of the
Services (including the copies of all licence agreements) have been supplied to the
Principals Representative.
 Confidential Information
 Constructional Plant
 1.




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Contract
 Contract Price
 (a)
    
    where the Principal has accepted a lump sum, the lump sum set out in schedule
6;(b)
    
    where the Principal has accepted rates, the sum ascertained by multiplying the
measured quantity of an item of the Services actually executed by the Service
Contractor by the corresponding rate in schedule 6; or(c)
    
    where the Principal has accepted lump sum and rates, an aggregate of the sums
referred to in paragraphs (a) and (b).
 Documentation
 End Date
 (a)
    
    where there is a Term, the expiry of the Term or earlier termination of the
Contract; or(b)
    
    otherwise, the date of Completion of all of the Services (including all
Portions of the Services) or earlier termination of the Contract.
 Entitlement
 (a)
    
    for any addition to, or adjustment to, the Contract Price;(b)
    
    for a progress payment; or(c)
    
    to recover any loss, cost, damage or expense of any kind:
 (i)
    
    arising under this Contract;(ii)
    
    relating to this Contract or any fact, matter or thing referred
to in this Contract; or(iii)
    
    arising out of or in connection with the performance of the
obligations of the Service Contractor pursuant to the Contract (including a
quantum meruit).
 Explosives
 Explosives Performance Standards
 Force Majeure Event
 GST
 GST Act Goods and Services Tax Act 2003
 Insolvent
 (a)
    
    it is (or states that it is) insolvent (as defined in the Companies Act);(b)
    
    it is in receivership, in receivership and management, in liquidation, in
provisional liquidation, under administration or wound up or has had a receiver
appointed to any part of its property;
 2.




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(c)
    
    it is subject to any arrangement, assignment, moratorium or composition,
protected from creditors under any statute, or dissolved (other than to carry out a
reconstruction or amalgamation while solvent on terms approved by the other party to
this Contract);(d)
    
    an application or order has been made (and, in the case of an application, it
is not stayed, withdrawn or dismissed within 30 days), resolution passed, proposal put
forward, or any other action taken, in each case in connection with that party, which
is preparatory to or could result in any of the circumstances detailed in any of
paragraphs (a), (b), (c) or (d) above;(e)
    
    it is taken (under section 335(1) of the Companies Act) to have failed to
comply with a statutory demand;(f)
    
    it is otherwise unable to pay its debts when they fall due; or(g)
    
    something having a substantially similar effect to any of the circumstances
detailed in any of paragraph (a) to (f) above happens in connection with that person
under the law of any jurisdiction.
 Key Personnel
 Law
 Material Breach
 Mine Procedures
 Parent Company Guarantee
 Particulars
 Portion of the Services
 Pre-Contract Information
 Principal Indemnified Parties
 Principal Supplied Items
 Products
 Product Supply Contract
 Quality Plan
 Reimbursable Expenses
 3.




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Safety Principles
 Separate Contractors
 Services
 Tax Invoice
 Variation Variation Information Request
 1.2
    
    Rules for interpreting this ContractHeadings and catchwords are for convenience only, and do not affect interpretation. The
following rules also apply in interpreting this Contract, except where the context makes it
clear that a rule is not intended to apply.
 (a)
    
    A reference to:
 (i)
    
    (legislation) legislation (including subordinate legislation)
is to that legislation as amended, re-enacted or replaced, and includes any
subordinate legislation issued under it;(ii)
    
    (documents/agreements) a document or agreement, or a provision
of a document or agreement, is to that document, agreement or provision as
amended, supplemented, replaced or novated;(iii)
    
    (parties) a party to this Contract or to any other document or
agreement includes a permitted substitute or a permitted assign of that party;(iv)
    
    (persons) a person includes any type of entity or body of
persons, whether or not it is incorporated or has a separate legal identity,
and any executor, administrator or successor in law of the person; and(v)
    
    (parts of things) anything (including a right, obligation or
concept) includes each part of it.
 (b)
    
    (number) A singular word includes the plural, and vice versa.(c)
    
    (gender) A word which suggests one gender includes the other gender.(d)
    
    (parts of speech) If a word is defined, another part of speech has a
corresponding meaning.(e)
    
    (examples) If an example is given of anything (including a right, obligation or
concept), such as by saying it includes something else, the example does not limit the
scope of that thing.(f)
    
    The words subsidiary, holding companyand related body corporatehave the same
meanings as in the Companies Act.(g)
    
    A reference to informationis to information of any kind in any form or medium,
whether formal or informal, written or unwritten, for example, computer software or
programs, concepts, data, drawings, ideas, knowledge, procedures, source codes or
object codes, technology or trade secrets.(h)
    
    A reference to dollarsor $is to an amount in Australian currency.
 4.




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(i)
    
    (this Contract) A reference to this Contract includes the agreement recorded by
this Contract.(j)
    
    (GST wording) Words defined in the GST Act have the same meaning in clauses
concerning GST.(k)
    
    The word applicablewhen used of a law is used to refer to any relevant law
(including any subordinate or delegated legislation or statutory instrument of any
kind) of a jurisdiction in or out of Papua New Guinea, and also to any relevant
judgment, order, policy, guideline, official directive or request (even if it does not
have the force of law) of any Authority or regulatory body, such as a stock exchange,
within or outside Papua New Guinea.
 1.3
    
    Business DaysIf the day on or by which a person must do something under this Contract is not a Business
Day if the act involves a payment that is due on demand, the person must do it on or by the
next Business Day.1.4
    
    Multiple partiesIf a party to this Contract is made up of more than one person, or a term is used in this
Contract to refer to more than one party:
 (a)
    
    an obligation of those persons is joint and several;(b)
    
    a right of those persons is held by each of them severally; and(c)
    
    any other reference to that party or term is a reference to each of those
persons separately, so that (for example) a representation, warranty or undertaking is
given by each of them separately.
 1.5
    
    Agreement comprises
 (a)
    
    The Mine Procedures are incorporated by reference in, and are taken to be part
of, this Contract to the extent that they are relevant to the Services.(b)
    
    In the event of any inconsistency between any of the following documents, they
take precedence over each other in the following descending order:
 (i)
    
    schedule 1, Additional Conditions;(ii)
    
    the General Terms and Conditions;(iii)
    
    schedules (schedule 2 to schedule 9 to this Contract) in the
order in which they appear; and(iv)
    
    Mine Procedures.
 1.6
    
    Prior agreementsThis Contract (together with the Product Supply Contract) contains the entire agreement
between the parties about its subject matter. Any previous understanding, agreement,
representation or warranty relating to that subject matter is replaced by these documents
and has no further effect.2.
    
    NATURE OF RELATIONSHIP2.1
    
    Independent contractorThe Service Contractor is engaged as an independent contractor. Nothing in this Contract
constitutes the Service Contractor as an employee, agent, partner or joint venturer of the
Principal.
 5.




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2.2
    
    No authority
 (a)
    
    The Service Contractor acknowledges and agrees that it has no authority to
incur and must not incur any obligation on behalf of the Principal except with the
express written instruction of the Principal.(b)
    
    The Service Contractor must not engage in any negotiations or discussions with
any Authority on behalf of the Principal except with the express written instruction of
the Principal.
 3.
    
    REPRESENTATIVES3.1
    
    The Principals Representative
 (a)
    
    The Principals Representative has authority to act on behalf of the Principal
for all purposes in connection with this Contract except for the purposes of:
 (i)
    
    termination of the Contract, whether pursuant to clause 18.1(c)
(for default) or clause 18.2 (for insolvency);(ii)
    
    the resolution of disputes, including pursuant to clause 19;
and(iii)
    
    waiver of any rights that the Principal may have under the
Contract or at law.
 (b)
    
    The Principals Representative:
 (i)
    
    must perform the functions of the Principals Representative
designated in this Contract;(ii)
    
    will carry out his or her functions under this Contract as the
agent of the Principal (and not as an independent certifier, assessor or
valuer);(iii)
    
    must, when valuing claims arrive at a reasonable measure of
work and time; and(iv)
    
    may delegate any of his or her functions under this Contract to
a nominee.
 (c)
    
    The Principal must promptly inform the Service Contractor in writing of:
 (i)
    
    any appointment of a new Principals Representative; and(ii)
    
    any delegation by the Principals Representative of his or her
functions under this Contract to a nominee, and the extent and the scope of
that delegation.
 (d)
    
    The Service Contractor must comply with all reasonable directions of the
Principals Representative relating to the performance of the Services in accordance
with this Contract.
 3.2
    
    Service Contractors Representative
 (a)
    
    The Service Contractors Representative has authority to act on behalf of the
Service Contractor for all purposes in connection with this Contract.(b)
    
    The Service Contractors Representative must:
 (i)
    
    at all times have authority to act on behalf of the Service
Contractor in respect of this Contract; and(ii)
    
    be approved by the Principals Representative.
 (c)
    
    The Service Contractor must ensure that the Service Contractors Representative
is not replaced without the prior approval of the Principals Representative.(d)
    
    The Service Contractors Representative must liaise with, and report to, the
Principals Representative on all aspects of the Services.
 6.




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##### 



4.
    
    SCOPE OF SERVICES4.1
    
    Scope of the Services
 (a)
    
    The Service Contractor must execute the Services in accordance with the
requirements of this Contract.(b)
    
    The Service Contractor acknowledges that the Services includes all work:
 (i)
    
    specifically referred to in this Contract; and(ii)
    
    which is otherwise necessary or desirable for the proper
execution and Completion of all of the Services (including each Portion of the
Services) and for the proper performance of the Service Contractors
obligations under this Contract,
  4.2
    
    Term for Services
 (a)
    
    The Service Contractor must commence performing the Services on the
Commencement Date and continue to perform the Services until the earlier of the expiry
of the Term or the date upon which this Contract is terminated.(b)
    
    On the first anniversary of the Commencement Date, the Service Contractor must
provide a binding letter of offer, capable of acceptance by the Principal, on the
following terms:
 (i)
    
    Revised pricing for all Services to be supplied pursuant to
this Contract; and(ii)
    
    A revised Term being the period of 6 years from the first
anniversary of the Commencement Date, (Offer").
  4.3
    
    Standard of ServicesThe Service Contractor must:
 (a)
    
    perform the Services and prepare all materials and data requested by the
Principal under this Contract:
 (i)
    
    diligently;(ii)
    
    competently and professionally, with the care and skill that
can be expected of a contractor experienced in providing services of the type
of the Services;(iii)
    
    in accordance with the Blasting Services Program and Blasting
Services Execution Plan; and(iv)
    
    otherwise in accordance with the terms of this Contract;
 (b)
    
    ensure that any subcontractor appointed by it performs that part of the
Services with the skill, care and diligence expected of a contractor experienced in
providing services of the type of the Services;(c)
    
    comply with any of its applicable occupational health, safety and environment
policies (as amended from time to time);
 7.




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##### 



(d)
    
    comply with the Law;(e)
    
    fully inform itself of the Principals requirements for the Services;(f)
    
    keep adequate records of work performed under this Contract and, if requested
by the Principals Representative to do so and where reasonable, promptly provide to
the Principal copies of those records and of all correspondence or other material
arising from or relating to the provision of the Services; and(g)
    
    maintain its quality assurance system in accordance with the standard referred
to in the Particulars.
 4.4
    
    Acknowledgment by Service ContractorThe Service Contractor acknowledges that:
 (a)
    
    the Principal has entered into this Contract relying on the skill, care,
expertise, experience and ability of the Service Contractor to provide the Services;
and(b)
    
    as the result of its own enquiries, it is satisfied as to the nature and
location of the Services to be performed, the general and local conditions and all
other matters which can in any way affect the performance or cost of performing the
Services.
 4.5
    
    ExclusivityThe Service Contractor will supply, and the Principal will purchase, all of the Services
required by the Principal at the Mine for the Term.4.6
    
    Service Contractor to provide all things required for performanceExcept as otherwise specified in this Contract, the Service Contractor will be required to
provide, as part of the Services, all things and services reasonably necessary to complete
the Services even if they are not expressly mentioned in the Contract.4.7
    
    Security of premisesThe Service Contractor must comply with the Principals directions, procedures and policies
relating to occupational health, safety and security when performing any part of the
Services on the Mine (including the Safety Principles and Mine Procedures).4.8
    
    Non-solicitationNeither party shall solicit or entice away from the other party (or attempt to do so) any
consultant or employee of the other party or engage any such person as a consultant,
employee or in any other capacity.5.
    
    VARIATIONS5.1
    
    Direction for a Variation
 (a)
    
    The Principals Representative may at any time direct the Service Contractor to
perform a Variation to the Services if that change is required by the Principal.(b)
    
    A Variation may involve increases in or additions to, reductions in or
omissions from, or changes in the character or the quality of the Services. If the
change requires the omission of work, the Principal may have the omitted work carried
out by itself.(c)
    
    A direction given under clause 5.1(a) may only be effected by a written form
expressly identified as a Variation, signed by the Principals Representative and
given to the Service Contractor which describes the Variation. The Service Contractor
must not carry out and shall have no Entitlement in relation to a Variation unless
either:
 (i)
    
    the Principals Representative has given a Variation direction
in accordance with this clause; or
 8.




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##### 



(ii)
    
    the Service Contractor has advised the Principals
Representative in writing that it has been directed to perform a Variation.
 (d)
    
    Before issuing a Variation, the Principals Representative may issue to the
Service Contractor a written form expressly identified as a Variation Information
Request advising the Service Contractor of the scope of the proposed change to the
Services and requiring the Service Contractor to, within the reasonable period
of time stated in the form, provide an estimate of the valuation of the proposed
change.(e)
    
    Within the reasonable period of time stipulated in the Variation Information
Request, the Service Contractor must provide to the Principals Representative a
written response containing the information required by the Variation Information
Request.(f)
    
    Additions to the scope must not be inconsistent with the core business
activities of the Service Contractor.(g)
    
    The Service Contractor may request a Variation for its own convenience which
may be approved, in his or her discretion, by the Principals Representative. Except
to the extent expressly included in the approval, the Service Contractor shall have no
Entitlement in relation to a Variation approved under this clause 5.1(g).
 5.2
    
    Valuation
 (a)
    
    If a Variation requires the Service Contractor to carry out work which involves
an increase or decrease in the overall cost of carrying out the Services, the
Principals Representative and the Service Contractors Representative must attempt to
agree whether any change to the Contract Price is required as a consequence, and if so,
whether an increase or decrease is required.(b)
    
    If the Principals Representative and the Service Contractors Representative
are unable to reach agreement, the Principals Representative may determine the change
to the Contract Price, if any, which it believes in its reasonable opinion is required.
In making a determination under this clause 5.2, the Principals Representative must
have regard to the following:
 (i)
    
    if the Contract prescribes specific rates or prices to be
applied in determining the value, those rates or prices;(ii)
    
    if clause 5.2(b)(i) does not apply, the rates or prices in the
schedule of rates in schedule 6 to the extent that it is reasonable to use
them;(iii)
    
    to the extent that neither clauses 5.2(b)(i) and 5.2(b)(ii)
apply, reasonable rates or prices;(iv)
    
    in determining the deduction to be made for work which is taken
out of the Contract, the deduction shall include a reasonable amount for profit
and overheads;(v)
    
    if the valuation relates to extra costs incurred by the Service
Contractor for delay or disruption, the valuation shall include a reasonable
amount for overheads but shall not include profit or loss of profit; and(vi)
    
    in relation to Services which the Principals Representative
expressly directs must be performed as daywork, that work shall be valued in
accordance with schedule 7.
 9.




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6.
    
    TIME6.1
    
    Performance of ServicesThe Service Contractor must commence execution of the Services from the Commencement Date
and continue to execute the Services progressively in an orderly manner, having regard to
the duration and sequence of activities shown on and in accordance with the Blasting
Services Program.6.2
    
    Blasting Services Program
 (a)
    
    The Service Contractor must ensure that the Blasting Services Program is
updated:
 (i)
    
    at the times stated in the Particulars; and(ii)
    
    within the time stipulated in a written request by the
Principals Representative,
  (b)
    
    Where a Blasting Services Program is rejected by the Principals Representative
for non-compliance with this Contract, the Service Contractor must submit a corrected
and revised Blasting Services Program within 2 days of being notified that the Blasting
Services Program is unacceptable.
 6.3
    
    Suspension
 (a)
    
    The Principals Representative may at any time give written notice to the
Service Contractor to suspend the execution of all or any part of the Services
(including details of the extent to which the Principals Representative requires the
Service Contractor to keep its personnel, subcontractors and Constructional Plant on
standby).(b)
    
    If the Service Contractor receives a written notice from the Principal under
clause 6.3(a), the Service Contractor must immediately suspend the execution of the
Services or the relevant part.(c)
    
    Subject to clause 6.3(g), the Principal must pay the Service Contractor,
instead of that part of the Contract Price payable for those Services not performed as
a consequence of the suspension (which will not be payable), compensation for the
suspension of the execution of the Services (or the relevant part):
 (i)
    
    in accordance with the standby rates in schedule 7 to the
extent that they are applicable;(ii)
    
    if there are no applicable rates in schedule 7, on such basis
as the Principals Representative and the Service Contractors Representative
may agree; or(iii)
    
    failing agreement, as the Principals Representative
reasonably determines,
  (i)
    
    keeping its personnel , subcontractors and Constructional Plant
on standby (to the extent stated in the written notice referred to in clause
6.3(a)); and(ii)
    
    the demobilisation and remobilisation of the Service
Contractors personnel, subcontractors and Constructional Plant.
 10.




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(d)
    
    The Principals Representative must give a written notice to the Service
Contractor adjusting the Contract Price to reflect the compensation referred to in
clause 6.3(c).(e)
    
    The Principals Representative may at any time give written notice to the
Service Contractor to resume the execution of the Services (or the relevant part) which
has been suspended.(f)
    
    If the Service Contractor receives a written notice under clause 6.3(e), the
Service Contractor must immediately remobilise to resume execution of the Services (or
the relevant part) which has been suspended.(g)
    
    If the Principals Representative gives a written notice under clause 6.3(a) as
a result of a breach by the Service Contractor of its obligations under this Contract,
the Service Contractor is not entitled to any compensation under clause 6.3(c).(h)
    
    If the Principals Representative gives a written notice under clause 6.3(a) as
a result of a breach by the Service Contractor of its obligations under this Contract
and if the breach is:
 (i)
    
    capable of rectification, the execution of the part of the
Services the subject of the written notice may be suspended until the breach is
rectified by the Service Contractor; or(ii)
    
    not capable of rectification, the period of suspension must be
reasonable.
 7.
    
    THE SERVICES7.1
    
    Service Contractors main obligationsThe Service Contractor must:
 (a)
    
    provide the Services in accordance with this Contract;(b)
    
    provide the Services for the Contract Price;(c)
    
    provide the Principal and the Principals Representative, at all reasonable
times, with access to all workshops and places where work is being prepared or carried
out, or from where materials, manufactured articles or machinery are being obtained for
or manufactured in connection with the Services;(d)
    
    comply with the Law in providing the Services under this Contract and
performing its other obligations under this Contract including any Law relating to
mining activities, industrial relations and the environment;(e)
    
    produce evidence to the Principal of accreditation, registration, licensing or
other Authority approvals in accordance with the requirements of this Contract or as
required by the Principals Representative;(f)
    
    attend and participate in meetings with the Principal in accordance with this
Contract and as reasonably required by the Principals Representative;(g)
    
    provide information and report to the Principal, in writing if required, in
relation to any aspect of the Services as reasonably required by the Principals
Representative;(h)
    
    comply with the Mine Procedures in providing the Services;(i)
    
    comply with the Principals training, employment and community conditions as
set out in Schedule 10; and(j)
    
    ensure that any of the Principals equipment within the Service Contractors
possession or control is kept in good working condition and the Service Contractor is
responsible for all loss of and damage to any of the Principals equipment while in the
Service Contractors possession or control, except to the extent to which the
 11.




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loss or
damage is due to normal wear and tear or the negligence of the Principal, Separate
Contractors or their personnel.
 7.2
    
    Compliance with Law
 (a)
    
    The Service Contractor must:
 (i)
    
    comply with the Law in the supply of the Services and
performing its other obligations under this Contract;(ii)
    
    obtain all Authority approvals (other than the Principal
Approvals) necessary in respect of the supply of the Services and its other
obligations under this Contract;(iii)
    
    comply with all guidelines issued by Authorities and the
Principal in respect of the Mine Procedures or the Services;(iv)
    
    promptly give the Principals Representative copies of all
relevant documents issued by Authorities;(v)
    
    except in relation to the Principal Approvals, the Service
Contractor must:
 (A)
    
    give all notices;(B)
    
    pay all levies, charges or fees; and(C)
    
    obtain all permits, approvals or authorisations,
  (b)
    
    If the Service Contractors compliance with Law necessitates a change to the
Services:
 (i)
    
    the Service Contractor must promptly inform the Principals
Representative in writing with details of that change together with the Service
Contractors proposal for carrying out that change (such proposal must be
consistent with the Service Contractors obligations under this Contract);(ii)
    
    the Service Contractor must obtain the Principals
Representatives written approval before it implements that proposal;(iii)
    
    if the Principals Representative does not approve the Service
Contractors proposal referred to in clause 7.2(b)(i), the Service Contractor
must develop that proposal until the Principals Representative approves the
revised proposal; and(iv)
    
    except to the extent set out in clause 9.2, the Service
Contractor shall have no Entitlement as a consequence of complying with this
clause 7.2.
 8.
    
    WARRANTIES AND ACKNOWLEDGMENTS8.1
    
    Warranties as to capacityEach of the Principal and the Service Contractor represents and warrants that:
 (a)
    
    (status) it is a company limited by shares;(b)
    
    (power) it has full legal capacity and power:
 (i)
    
    to own its property and assets and to carry on its business;
and(ii)
    
    to enter into this Contract and to carry out the transactions
that it contemplates;
 (c)
    
    (corporate authority) it has taken all corporate action necessary or desirable
to authorise its entry into this Contract and to carry out the transactions that it
contemplates;
 12.




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(d)
    
    (authorisations) it holds each authorisation that is necessary or desirable:
 (i)
    
    to execute this Contract and to carry out the transactions that
it contemplates; and(ii)
    
    to ensure that this Contract is legal, valid, binding and
admissible in evidence,
  (e)
    
    (document effective) this Contract constitutes its legal, valid and binding
obligations, enforceable against it in accordance with its terms (except to the extent
limited by equitable principles and laws affecting creditors rights generally).
 8.2
    
    Warranties as to the Services
 (a)
    
    The Service Contractor warrants that the Services will:
 (i)
    
    satisfy the Explosives Performance Standards;(ii)
    
    comply with the description in this Contract;(iii)
    
    be suitable for the purpose made known to the Service
Contractor by the Principal;(iv)
    
    comply with the Law;(v)
    
    comply with international standards and the Australian
explosives code as published by the Department of Transport and Regional
Services, in force from time to time;(vi)
    
    comply with industry best practice; and(vii)
    
    comply with all lawful and all reasonable standards, rules,
directions and requirements set by any Authority.
 (b)
    
    The Service Contractor warrants that:
 (i)
    
    it has the expertise, experience and capability, including
sufficient and competent employees or subcontractors to provide the Services
efficiently, expeditiously and with due skill, care and diligence;(ii)
    
    it is legally entitled to use any of the Service Contractor
Intellectual Property used by it in connection with the provision of the
Services;(iii)
    
    the manufacture, sale or use of the Explosives does not and
will not infringe the Intellectual Property Rights of any third party;(iv)
    
    the Service Contractor has good and marketable title to the
Explosives;(v)
    
    in relation to the Services and Explosives, the Service
Contractor and the Service Contractors personnel are in possession of, or will
be able to obtain, all requisite authorisations from Authorities (other than
the Principal Approvals), at the Service Contractors own cost; and(vi)
    
    the Service Contractor is able to deliver the Services and
comply with all of its obligations under this Contract.
 (c)
    
    The Service Contractor acknowledges that the Services include all work:
 (i)
    
    specifically referred to in this Contract; and(ii)
    
    which is otherwise necessary for the proper execution and
completion of the Services and for the proper performance of the Service
Contractors obligations under this Contract.
 13.




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##### 



8.3
    
    Manufacturers and other warranties for the Explosives
 (a)
    
    With respect to materials, equipment or components purchased by the Service
Contractor for performance of the Services (including the Explosives) the Service
Contractor must:
 (i)
    
    provide all usual manufacturers, importers and any applicable
third party warranties in respect of such materials, equipment or components;
or(ii)
    
    assign to the Principal any warranties which the Service
Contractor may have received from the suppliers of such materials, equipment or
components.
 (b)
    
    During the period of the warranties obtained by the Service Contractor for the
benefit of the Principal referred to in clause 8.3(a)(ii), the Service Contractor must
take all reasonable action required by the Principal to enforce those warranties, or
assist the Principal to enforce those warranties.
 8.4
    
    Acknowledgments
 (a)
    
    The Service Contractor acknowledges that:
 (i)
    
    it has examined the Mine and its surroundings;(ii)
    
    it has examined all other information relevant to the risks,
contingencies and other circumstances having an effect on its obligations under
this Contract which is obtainable by making reasonable enquiries;(iii)
    
    it has examined this Contract;(iv)
    
    it has examined all of the Pre-Contract Information, has
independently verified whether the Pre-Contract Information is factual and has
not relied on the Pre-Contract Information except to the extent that it has
verified it;(v)
    
    it has entered into this Contract based upon its own
investigations, examinations and determinations; and(vi)
    
    it is not relieved of its obligations under this Contract, and
does not have any remedy against the Principal, by reason of the existence or
occurrence of any matter or thing not anticipated by the Service Contractor as
at the date of this Contract and which may not be contemplated by this
Contract.
 (b)
    
    Subject to the other provisions of this Contract, the Service Contractor
warrants that it is practicable to execute the Services in accordance with this
Contract without any need for changes in the Services.(c)
    
    The Service Contractor acknowledges that no comment, review, representation,
vetting, inspection, testing or approval by the Principal or the Principals
Representative (including as part of the Business Review & Development Group) in
respect of the Service Contractors obligations under this Contract will lessen or
otherwise affect the Service Contractors obligations under this Contract.
 9.
    
    SERVICES-RELATED OBLIGATIONS9.1
    
    Blasting Services Execution Plan
 (a)
    
    The Service Contractor and Principal together must ensure that the Blasting
Services Execution Plan is updated:
 (i)
    
    at the times stated in the Particulars; and(ii)
    
    in accordance with a written request of the Principals
Representative within the time stipulated in the request,
  14.




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(b)
    
    The Service Contractor warrants that compliance with the Blasting Services
Execution Plan will ensure that the Services are executed in accordance with the
requirements of this Contract.(c)
    
    The Service Contractor acknowledges that if it is in fact not feasible to
execute the Services in accordance with the Blasting Services Execution Plan, it must
execute the Services using whatever methodology may prove to be necessary to complete
the Services in accordance with this Contract.(d)
    
    Nothing in this clause 9.1 entitles the Service Contractor to any additional
compensation not otherwise set out in this Contract.
 9.2
    
    Change in LawIf there is a Change in Law which:
 (a)
    
    necessitates a change to:
 (i)
    
    the Services, or(ii)
    
    a fee or charge which the Service Contractor is obliged to pay; and
 (b)
    
    causes the Service Contractor to incur more or less cost than otherwise would
have been incurred,
  9.3
    
    Quality management and qualitative non-performance
 (a)
    
    The Service Contractor must:
 (i)
    
    use good quality, new and undamaged materials (unless otherwise
specified in this Contract) for the Services which must be suitable for the
purpose for which they are required;(ii)
    
    ensure that all workmanship is of the highest quality and
standards and is in accordance with the requirements of this Contract; and(iii)
    
    subject to any express provisions of this Contract to the
contrary, comply with relevant standards (including international standards,
codes of practice and manufacturers standards) when executing the Services.
 (b)
    
    The Service Contractor must give the Principals Representative access to the
Service Contractors and each subcontractors Quality Assurance Systems to enable
monitoring and quality auditing.(c)
    
    The Service Contractor warrants that compliance with the Quality Plan will
ensure that the Services are executed in accordance with the requirements of this
Contract.(d)
    
    If the Principals Representative reasonably considers any Services not to be,
or if the Services are not, in accordance with this Contract, the Principals
Representative may:
 (i)
    
    direct the Service Contractor to rectify any part of the
Services; or(ii)
    
    direct the Service Contractor not to rectify that part of the
Services.
 (e)
    
    The Principal may:
 (i)
    
    have the work referred to in clause 9.3(d)(i) carried out by
others at the Service Contractors cost if:
 (A)
    
    the Principals Representative has directed the
Service Contractor to rectify a part of the Services in accordance with
clause 9.3(d)(i) within a reasonable period; and
 15.




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(B)
    
    the Service Contractor has failed to rectify that
work within that period; or
 (ii)
    
    have the work carried out by others at the Service Contractors
cost if the Principals Representative has directed the Service Contractor not
to rectify that work pursuant to clause 9.3(d)(ii),
  9.4
    
    Explosives Performance Standards
 (a)
    
    The Service Contractor must monitor each item of Services to determine the
levels achieved by that item of Services relative to the Explosives Performance
Standards in accordance with the procedures outlined in schedule 2.(b)
    
    If any item of Services does not meet the Explosives Performance Standards as a
result of the Service Contractors failure to execute the Services in accordance with
this Contract, the Service Contractor must pay the Principal its reasonable costs,
losses and expenses incurred by the Principal as a direct result of the failure.(c)
    
    If clause 9.4(b) is struck out or is unenforceable for any reason, the
Principal will be entitled to claim damages at common law and/or in equity from the
Service Contractor for any failure to execute the Services in accordance with the
Contract.
 9.5
    
    Removal of materials and Constructional Plant from the MineThe Service Contractor may not remove from the Mine any materials or Constructional Plant
brought onto the Mine without the prior written approval of the Principals Representative,
not to be unreasonably withheld.9.6
    
    Industrial relations
 (a)
    
    The Service Contractor must, and must ensure that its subcontractors, comply
with all applicable rules.(b)
    
    The Service Contractor must regularly consult with the Principals
Representative throughout the execution of the Services concerning any industrial
relations issues which may arise.(c)
    
    The Service Contractor must ensure that any industrial agreement entered into
by the Service Contractor does not affect, or will not have any impact on, any existing
or future industrial agreements that have been entered, or that may be entered, into by
the Principal.(d)
    
    The Service Contractor must, in the event of any industrial dispute involving
its workforce on the Mine, ensure that the Principals operations on the Mine are not
affected in any manner by such industrial dispute, except to the extent the dispute is
a general dispute involving other contractors and employees of the Principal.
 10.
    
    PAYMENT10.1
    
    The Principals payment obligations
 (a)
    
    The Principal must pay the Service Contractor the Contract Price in accordance
with the requirements of this Contract. Unless otherwise agreed in writing by the
parties, payments will be made in PNG Kina.(b)
    
    The lump sum breakdown in schedule 6 may be referred to by the Principals
Representative for the purposes of:
 (i)
    
    the assessment of progress claims; and(ii)
    
    the valuation of Variations pursuant to clause 5.2 to the
extent that items listed in the lump sum breakdown are relevant,
 16.




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10.2
    
    Payment
 (a)
    
    The Service Contractor must submit to the Principals Representative within 4
days after the end of each month a payment claim in the form of the Principals
contract claim form attaching the information required by the Principals
Representative:
 (i)
    
    showing the value of the Services executed by the Service
Contractor to the end of the previous month;(ii)
    
    including details of any amount claimed by the Service
Contractors subcontractors which is the subject of a dispute between the
Service Contractor and those subcontractors and details of the dispute; and(iii)
    
    documentary evidence that it has incurred a fee for Services
performed and the Reimbursable Expenses claimed.
 (b)
    
    Within 4 days of receipt by the Principals Representative of a claim provided
in accordance with clause 10.2(a), the Principals Representative must determine in
writing any variations to the amount payable to the Service Contractor. The amount
payable will be:
 (i)
    
    the assessment by the Principals Representative of the value
of the Services performed by the Service Contractor for the relevant period
which must take into account the likely cost of rectifying any defects in the
Services and must exclude any amounts in relation to which the Service
Contractor has no Entitlement;(ii)
    
    the amount of any Reimbursable Expenses incurred by the Service
Contractor with the prior written approval of the Principals Representative;(iii)
    
    any amounts due from the Principal to the Service Contractor
pursuant to this Contract;(iv)
    
    less the amounts already paid by the Principal to the Service
Contractor in relation to the Contract and the Services; and(v)
    
    less the amount of any money which is due or which may become
due from the Service Contractor to the Principal in respect of this Contract or
the Services and amounts already paid to the Service Contractor in respect of
the Contract and amounts which the Principal is entitled to deduct or withhold.
 (c)
    
    The Service Contractor must give the Principal a Tax Invoice in respect of the
amount the subject matter of a determination issued by the Principals Representative
pursuant to clauses 10.2(b), 10.5 within 4 days of receipt of that determination. Any
Tax Invoice issued in respect of the amount the subject of a determination under clause
10.2(b) should also include any amount deducted under clause 10.2(b)(v) in respect of
that determination.(d)
    
    Where an amount is due from the Principal to the Service Contractor in respect
of a determination issued pursuant to clauses 10.2(b) or 10.5 , the Principal must pay
the Service Contractor the amount determined as payable by the Principals
Representative under clauses 10.2(b) or 10.5 thirty (30) days after the date of the
invoice for that month.(e)
    
    The Service Contractor must give the Principal a Tax Invoice in respect of the
amount the subject matter of a determination or payment schedule issued by the
Principals Representative pursuant to clauses 10.2(b), 10.5 within 4 days of receipt
of that determination. If the Principal fails to provide a payment schedule within 4
days, the Service Contractor may issue a Tax Invoice for the whole amount of its
payment claim, provided that the Principal may seek an adjustment
 17.




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to any subsequent
invoice or refer the matter to dispute resolution should there be any discrepancies.(f)
    
    Payments made by the Principal are on account only and are not:
 (i)
    
    evidence of the value of work; or(ii)
    
    an admission of liability on the part of the Principal.
 (g)
    
    Where an amount is due from the Service Contractor to the Principal in respect
of a determination issued pursuant to clauses 10.2(b) or 10.5 , the Service Contractor
must, within thirty (30) days after receipt of that determination, pay the Principal
the amount stated in that determination as due from the Service Contractor to the
Principal.(h)
    
    Where an amount remains overdue for more than 30 days, the Service Contractor,
by providing 14 days written notice to the Principal, may elect to suspend all or part
of the Services under this Contract for a period as long as the payment remains
overdue.
 10.3
    
    Set off
 (a)
    
    The Principal may set-off or deduct from:
 (i)
    
    any amounts due to the Service Contractor under this Contract
(including any amounts certified by the Principals Representative for payment
by the Principal to the Services Contractor); or(ii)
    
    any money due or which may become due from the Service
Contractor to the Principal in respect of this Contract or the Services,
  10.4
    
    Final Payment Claim
 (a)
    
    Within 90 calendar days after the later to occur of the End Date and the
performance of all the Service Contractors obligations under the Contract, the Service
Contractor must provide to the Principals Representative a payment claim titled Final
Payment Claim.(b)
    
    The Service Contractor must include in the Final Payment Claim all amounts
which the Service Contractor considers to be due to it from the Principal in respect of
this Contract and the performance by it of the Services.(c)
    
    After the expiration of the 90 calendar day period in clause 10.4(a), the
Service Contractor shall have no Entitlement in relation to the performance of the
obligations of the Service Contractor under the Contract, or in any way relating to the
Contract or the work described in it.
 10.5
    
    Final Payment DeterminationThe Principals Representative:
 (a)
    
    must within 10 Business Days after receipt of the Service Contractors Final
Payment Claim; or(b)
    
    if the Service Contractor does not comply with its obligations under clause
10.4(a), at any time,
 Final Payment
Determination
 18.




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10.6
    
    Failure to submit claimThe Principals Representative may make a determination under clause 10.2(b):
 (a)
    
    if the Service Contractor fails to submit any statement or payment claim in
accordance with the Contract; or(b)
    
    at any time prior to the Final Payment Determination.
 10.7
    
    Fixed Contract PriceThe rates set out in schedule 5 remain fixed until the first Review Date.10.8
    
    Rise and fallThe rates in schedule 6 will be adjusted for rise and fall in accordance with the formula
set out in part C of schedule 6 with the first review being 1 January 2008 and then every 12
months following this date.10.9
    
    Payment for Plant and Materials prior to DeliveryThe Service Contractor shall have no Entitlement to payment for unused materials or goods
unless:
 (a)
    
    schedule 6 provides that such a payment claim can be made for those unused
materials or goods;(b)
    
    otherwise, the Service Contractor provides with the payment claim evidence
that:
 (i)
    
    property in the materials or goods has passed to the Principal
or will pass on the making of the payment; and(ii)
    
    the materials or goods have been properly stored or labelled as
the property of the Principal and insured.
 10.10
    
    Taxes
 (a)
    
    Unless otherwise expressly provided in this Contract, the Service Contractor
must pay all taxes including levies, duties, withholdings, and assessments due in
connection with the Services and the Contract and the Principal must pay all taxes
excluding income or company taxes but including levies and import duties on items of
Constructional Plant and vehicles to the extent that such taxes are not creditable to
the party liable for the tax.(b)
    
    Unless otherwise expressly provided in the Contract, the Contract Price(s) due
under the Contract shall not be varied or amended by any tax, duty, levy or other
impost payable in connection with performance of the Contract. Where an amount is
required to be withheld by the Principal and remitted to an Authority under a Law on
behalf of the Service Contractor, the Contract Price(s) payable to the Service
Contractor shall be reduced by such amount.  The Principal shall provide the Service
Contractor with a payment summary in respect of such withheld amount upon request by
the Service Contractor, or otherwise in accordance with the Law.
 10.11
    
    Liability for employment related taxes and costs
 (a)
    
    The Service Contractor must pay all wages, superannuation and any other
contributions or payments required by law to be paid to, in respect of or arising in
relation to the employment of any employee, subcontractor or agent engaged by the
Service Contractor in the performance of any services. The Service Contractor
acknowledges that such persons are not the employees of the Principal and the Service
Contractor bears, and the Principal does not bear, any liability for such payments.
 19.




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(b)
    
    The Service Contractor indemnifies the Principal in relation to any payments
(including all legal and other costs, penalties, fines or interest in respect of such
payments) made or amounts incurred by the Principal as a result of any claim or action,
(including without limitation a claim or action brought by the Service Contractor, any
employee, subcontractor, agent or any government or statutory authority) with regard to
any amount referred to in this clause.
 11.
    
    GOODS & SERVICES TAX11.1
    
    Application of clause
 (a)
    
    This clause applies if any party (Supplier) is or may become liable to pay GST
in relation to Services (as defined in the GST Act) of any good, service or other thing
which is made to another party (Recipient) under this Contract (Taxable Supply).(b)
    
    Unless otherwise specified, a reference to any amount payable or consideration
to be provided for a Taxable Supply is a reference to that amount or consideration
having been determined without provision for any GST payable by the Service Contractor
on those Services (GST Exclusive Amount).
 11.2
    
    GST payable
 (a)
    
    The Recipient must increase the GST Exclusive Amount of any payment for a
Taxable Supply by an additional amount as notified by the Service Contractor to the
Recipient sufficient that the total amount payable by the Recipient (after discounting
for the amount of any GST liability payable by the Service Contractor on that total) is
equal to the GST Exclusive Amount.(b)
    
    GST payable under paragraph (a) is payable by the Recipient, without deduction
or set-off of any other amount.
 11.3
    
    Tax Invoice
 (a)
    
    The Service Contractor must issue a Tax Invoice to the Recipient for the amount
of GST referable to each Taxable Supply, and, where the Service Contractor is the
Service Contractor in respect of Taxable Supplies the subject of any progress claim,
within 3 Business Days of receipt of the progress claim.(b)
    
    A monthly statement will not be regarded as a Tax Invoice or other invoice
notifying an obligation to make payment.
 11.4
    
    Particulars of GSTThe Service Contractor must include in an invoice under this clause such particulars as are
required by the GST Act in order that the Recipient may obtain an input tax credit for the
amount of GST payable on the Taxable Supply.11.5
    
    Adjustment EventWhere an Adjustment Event in relation to any Taxable Supply has occurred, the Service
Contractor must provide an Adjustment Note to the Recipient within 20 Business Days.11.6
    
    IndemnitiesWhere an amount is payable by one party (Indemnifier) to another party (Indemnified)
pursuant to an indemnity, warranty or obligation to reimburse or pay any amount under this
Contract, the amount recoverable under this indemnity, warranty or obligation to reimburse
must be reduced by the amount of any input tax credit or other credit to which:
 (a)
    
    the Indemnified; or(b)
    
    any member of a GST Group (as defined in the GST Act) of which the Indemnified
is also a member,
  20.




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12.
    
    THE MINE12.1
    
    Access to Mine
 (a)
    
    Subject to clause 12.1(b) and where required, the Service Contractor may enter
and access the Mine sufficient for it to carry out its obligations under this Contract
and in accordance with the Blasting Services Execution Plan and the Blasting
Services Program.(b)
    
    The Principal must make the Principal Supplied Items available to the Service
Contractor.(c)
    
    The Service Contractor may not enter into other parts of the Mine without the
prior written approval of the Principals Representative.
 12.2
    
    Operation of Existing Plant and hours of work
 (a)
    
    Clause 12.2(b) applies if and only if the Particulars state that it applies.(b)
    
    The Service Contractor must:
 (i)
    
    subject to clause 12.2(b)(ii), ensure that the continuous
operation of the existing plant is not affected in any way by the execution of
the Services; and(ii)
    
    if there is any unavoidable interruption to the operation of
the existing plant caused by the Services, minimise that interruption to the
extent practically possible.
 12.3
    
    Work Hours
 (a)
    
    Unless otherwise provided in this Contract, the Service Contractor may only
execute the Services on the Mine during the working hours set out in the Particulars.(b)
    
    The Service Contractor may seek the written approval of the Principals
Representative to execute the Services outside the working hours referred to in clause
12.3(a) if such work is necessary to enable the Service Contractor to comply with the
Blasting Services Program.(c)
    
    The Principals Representative may (at its absolute discretion) give the
Service Contractor written approval to execute the Services outside the working hours
referred to in clause 12.3(a). The Principals Representative may take into account
factors such as interruption to the continuous operation of the existing plant when
considering the Service Contractors request under clause 12.3(b).(d)
    
    The Service Contractor will not be liable for any interruption to the Services
resulting from the non approval from the Principal under this clause 12.3.
 12.4
    
    Access for the Principal, the Principals Representative and others and Mine security
 (a)
    
    If the Principal makes the Principal Supplied Items available to the Service
Contractor pursuant to clause 12.1(b), the Service Contractor:
 (i)
    
    must ensure that the Principal, the Principals Representative
and any other person authorised by the Principals Representative (including
Separate Contractors) have safe access to the Principal Supplied Items;(ii)
    
    may not allow any person not connected with the Services into
the Principal Supplied Items without the prior written approval of the
Principals Representative; and(iii)
    
    must control access within the Principal Supplied Items.
 21.




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(b)
    
    The Service Contractor must provide the Principal and the Principals
Representative, at all reasonable times, with access to all workshops and places where
work is being prepared or carried out within the Mine.
 12.5
    
    Mine part of Operation of the Principal
 (a)
    
    The Service Contractor acknowledges that, while the Services are being
performed on the Mine:
 (i)
    
    the Principal will continue to conduct its business from the
Mine;(ii)
    
    the Service Contractor shall have no right of exclusive
occupation of any part of the Mine and shall access the Mine only in accordance
with the directions of the Principals Representative;(iii)
    
    the ordinary operations of the Principal will result in delays
and disruptions to the performance of the Services;(iv)
    
    the Principals Representative may give directions to the
Service Contractor to minimise the disruption to the conduct of the Principals
business;(v)
    
    clients, suppliers, contractors, employees and agents of the
Principal will have access to the Mine to conduct business with the Principal;
and(vi)
    
    the Service Contractor must:
 (A)
    
    perform the Services in such a manner as to
interfere to the least extent possible with the conduct of the business
of the Principal and of any contractors or invitees of the Principal on
the Mine;(B)
    
    only access the Mine during the hours and on the
days provided for in the Contract;(C)
    
    take all steps necessary to protect the safety of
the Principal and the employees, agents, and invitees of the Principal
and of contractors of the Principal from risks to safety caused by the
performance of the Services;(D)
    
    complete such safety or other training or
induction as the Principals Representative from time to time directs;(E)
    
    comply with all procedures, policies and rules
adopted from time to time by the Principal in connection with the Mine;(F)
    
    keep itself informed as to the requirements of,
comply with and not do anything which may place the Principal in breach
of the Law applying to the Mine and the operation of the Principals
business;(G)
    
    erect appropriate signage for the benefit of
employees, agents and invitees of the Principal at the Mine to enable
them to find their way around the Mine;(H)
    
    keep the Mine clean and tidy at all times;(I)
    
    keep the Principals Representative and the
Principal informed as frequently as possible and at least on a daily
basis of the operations of the Service Contractor which may affect the
conduct of the business of the Principal at the Mine and to refrain from
performing any matter or thing which may affect the operations of the
Principal without first obtaining the approval in writing of the
Principals Representative; and(J)
    
    consult and co-operate with the Principals
Representative, the Principal and any other contractor or supplier of
the Principal and attend meetings as required by the Principals
Representative in
 22.




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relation to the interface between the business
operations of the Principal and the performance of the Services.
 (b)
    
    The Service Contractor shall not have any Entitlement as a consequence of the
matters described in this clause 12.5.
 12.6
    
    Safety
 (a)
    
    The Service Contractor must provide safe working conditions for all persons
carrying out the Services for or on behalf of the Service Contractor, and at all times
while on the Mine comply with the Principals Safety Principles, Mine Procedures,
occupational health and safety policies and safety and health management system.(b)
    
    The Service Contractors Representative must immediately notify the Principals
Representative in writing of each serious injury and near miss which occurs in
providing the Services. The notice must specify any corrective actions taken or to be
taken to prevent recurrence.(c)
    
    The Principals Representative may direct the Service Contractor to permanently
remove any person from the Mine if, in the opinion of the Principals Representative,
the person:
 (i)
    
    is guilty of misconduct or is incompetent or negligent; or(ii)
    
    has contravened any applicable rules of the Principal or an
Authority on safety or safe working procedures.
 12.7
    
    Induction Costs
 (a)
    
    Except for the costs described in clause 10.6(b), the Service Contractor must
pay for all induction costs for personnel including generic metalliferous inductions,
medicals, drug and alcohol tests, initial lead-in-blood tests and any other Mine access
requirements.(b)
    
    Subject to clause 10.6(c), the Principal is responsible for and shall bear the
cost of providing induction for the Service Contractors personnel which relates only
to the Services.(c)
    
    If the Principals Representative determines, in his or her sole discretion,
that the Service Contractor has experienced a high turnover of staff, the Principal
will cease to pay for induction costs described in clause 10.6(b) and the costs
incurred by the Principal in providing that induction shall be a debt due from the
Service Contractor to the Principal.
 12.8
    
    Separate Contractors
 (a)
    
    The Service Contractor acknowledges that Separate Contractors may be present on
the Mine during the execution of the Services by the Service Contractor.(b)
    
    When carrying out Services on the Mine, the Service Contractor must:
 (i)
    
    co-operate with any Separate Contractors;(ii)
    
    not unreasonably obstruct, delay or interfere with Separate
Contractors work;(iii)
    
    not damage Separate Contractors work;(iv)
    
    comply with all reasonable written directions from the
Principals Representative regarding Separate Contractors and their work; and(v)
    
    allow any Separate Contractors engaged by the Principal to use
the items, services and amenities which are available for use on the Mine.
 23.




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(c)
    
    Any action of the Service Contractor under clause 12.8(b) does not lessen or
otherwise affect the Service Contractors obligations under this Contract.(d)
    
    The Service Contractor will not be liable for any interruption to the Services
resulting from delays caused by Separate Contractors.
 12.9
    
    Environmental obligations
 (a)
    
    The Service Contractor must:
 (i)
    
    comply with the Principals environmental management system as
notified by the Principal from time to time;(ii)
    
    comply with all requirements of the Law and this Contract for
the protection of the environment; and(iii)
    
    execute the Services in a manner so as to avoid unlawful
pollution of the Mine and its surroundings.
 (b)
    
    The Service Contractor is responsible for, and must make good, any damage to
the environment caused by the execution of the Services (including any unlawful
pollution of the Mine or its surroundings), other than in accordance with the Contract
from time to time.(c)
    
    The Service Contractor must:
 (i)
    
    notify the Principals Representative of any unlawful pollution
of the Mine or any complaint made by the public;(ii)
    
    clean up any unlawful pollution of the Mine and its
surroundings caused in the execution of the Services; and(iii)
    
    comply with all directions of the Principals Representative
and any Authority regarding cleaning up that pollution.
 12.10
    
    Principal-Supplied Items
 (a)
    
    Subject to clause 12.10(b) and clause 12.10(c), the Principal must provide the
items, services and amenities set out in schedule 8 for use by the Service Contractor
in executing the Services.(b)
    
    Where schedule 8 states that the Service Contractor must pay for the use of
specific items, services and amenities, the Service Contractor must do so.(c)
    
    The Service Contractor must comply with the Principals Representatives
instructions when using the items, services and amenities referred to in clause
12.10(a).(d)
    
    The Service Contractor uses the Principal Supplied Items at its own risk
however the Principal releases the Service Contractor from any liability that may arise
due to the use, supply, or failure to supply, of the Principal Supplied Items where
those items are supplied outside of specification (such specifications as contained in
Schedule 8).
 13.
    
    PERSONNEL AND SUBCONTRACTING13.1
    
    Personnel
 (a)
    
    The Service Contractor must:
 (i)
    
    provide experienced and skilled personnel to execute the
Services in accordance with its obligations under this Contract and, without
limiting the generality of this clause, in accordance with position
descriptions provided by the Service Contractor; and
 24.




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(ii)
    
    ensure that all Services are executed under the supervision of
appropriately qualified and experienced personnel.
 (b)
    
    The Service Contractor must:
 (i)
    
    engage the Key Personnel to perform the roles identified for
them in schedule 2;(ii)
    
    for the removal of doubt, comply with the Principals training
and localisation policies;(iii)
    
    not permit Key Personnel to undertake any other assignment
which would conflict with the Service Contractors obligations under this
Contract or the Principals interests generally; and(iv)
    
    pay for the induction and mobilisation costs of any other
persons that are employed by the Service Contractor as additional or
replacement Key Personnel and to the extent that the Principal bears those
costs, those costs shall be a debt due from the Service Contractor to the
Principal.
 (c)
    
    Where any of the Service Contractors personnel are primarily employed for
Services on the Mine, the terms of employment of the Service Contractors personnel
must be consistent with those of the Principal for similar positions. For the purposes
of this clause, the Principal will provide the Service Contractor with a summary of its
employment conditions.(d)
    
    The Service Contractors responsibility for the performance of the Services and
for the work and performance of its personnel is not altered in any way by this
clause 13.1 or by anything done in accordance with this clause 13.1.(e)
    
    The Service Contractor must not replace or remove any Key Personnel without
obtaining the prior written approval of the Principals Representative, whose approval
is not to be unreasonably withheld.(f)
    
    The Service Contractor must not (without the prior written approval of the
Principals Representative):
 (i)
    
    allow any Key Personnel to delegate to any other persons any
part of the Services for which that Key Personnel is responsible; or(ii)
    
    allocate any Key Personnel to perform work not related to the
Services.
 (g)
    
    The Principals Representative may direct the Service Contractor to remove from
the Mine or from any activity connected with the Services, any person employed in
connection with the Services who, in the opinion of the Principals Representative, is
guilty of misconduct or is incompetent or negligent or is otherwise interfering with
the orderly progress of the Services.(h)
    
    The Service Contractor must comply with a direction made under clause 13.1(g)
within the time specified by the Principals Representative.
 13.2
    
    Induction and training costs
 (a)
    
    Except for the costs described in clause 13.2(b), the Service Contractor must
pay for all induction costs for personnel including generic metalliferous inductions,
medicals, drug and alcohol tests, initial lead-in-blood tests and any other Mine access
requirements.(b)
    
    Subject to clause 13.2(c), the Principal is responsible for and shall bear the
cost of providing induction and training for the Service Contractors personnel which
relates only to the Services and the Principals Property.(c)
    
    If the Principals Representative determines, in his or her sole discretion,
that the Service Contractor has experienced a high turnover of staff on the Mine, the
 25.




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Principal will cease to pay for induction costs described in clause 13.2(b) and the
costs incurred by the Principal in providing that induction shall be a debt due from
the Service Contractor to the Principal.(d)
    
    Except as provided in clause 13.2(b), the Service Contractor is responsible for
and shall bear the cost of providing training for its Key Personnel, its other
employees, agents and subcontractors in the provision of the Services.
 13.3
    
    Subcontracting
 (a)
    
    Subject to clause 13.3(b), the Service Contractor may enter into subcontracts
for the execution of the Services.(b)
    
    The Service Contractor must:
 (i)
    
    obtain the Principals Representatives written approval (not
to be unreasonably withheld) before appointing a subcontractor to execute any
part of the Services; and(ii)
    
    promptly give the Principals Representative any information
requested by the Principals Representative to enable it to consider any
request for approval from the Service Contractor to appoint a subcontractor.
 (c)
    
    If the Service Contractor engages a subcontractor, the Service Contractor:
 (i)
    
    must ensure the work performed by the subcontractor meets the
requirements of this Contract;(ii)
    
    must manage and co-ordinate the performance of each
subcontractor to ensure the quality and timeliness of its performance meet the
requirements of this Contract for the Services;(iii)
    
    is liable to the Principal for the acts and defaults of that
subcontractor as if they were the acts and defaults of the Service Contractor;
and(iv)
    
    must be able to immediately terminate the engagement of the
subcontractor if this Contract is terminated.
 (d)
    
    The Service Contractors obligations under this Contract are not reduced or
otherwise affected by subcontracting the performance of those obligations.(e)
    
    The Service Contractor must ensure that all subcontracts for the Services
adequately address all industrial relations, safety, environmental and programming
issues relevant to the Services.(f)
    
    The Service Contractor must ensure that:
 (i)
    
    all subcontractors are accredited to perform work on the Mine
in accordance with the Principals accreditation process; or(ii)
    
    if any subcontractor is not so accredited, that the
subcontractor complies with the requirements of the Principal.
 (g)
    
    The Service Contractor must supply the Principal with an unpriced copy of any
subcontract for part of the Services.(h)
    
    The Service Contractor must, before it mobilises a subcontractor on the Mine,
give the Principals Representative the following details:
 (i)
    
    identity of the subcontractor and details of the part of the
Services to be executed by that subcontractor;(ii)
    
    the period for which that subcontractor will be on the Mine;
and(iii)
    
    details of that subcontractors employees and Constructional
Plant.
 26.




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14.
    
    MEETING AND REPORTING OBLIGATIONS14.1
    
    Business Review and Development Group (BRAD)
 (a)
    
    The BRAD Group comprises:
 (i)
    
    the Principals Representative;(ii)
    
    the Service Contractors Representative; and(iii)
    
    any other person the Principal or the Principals
Representative requires.
 (b)
    
    The Service Contractor, when the Principals Representative requires, must
ensure that representatives of the Service Contractors subcontractors attend BRAD
Group meetings.(c)
    
    The functions of the BRAD Group include:
 (i)
    
    reviewing the progress of the Services in relation to the
Blasting Services Program and the performance of the Service Contractor;(ii)
    
    reviewing the quality of work and any remedial measures
required; and(iii)
    
    working towards optimising the efficiency, cost and
performance of the Services through continual improvement by the Service
Contractor working with the Principals Representative.
 (d)
    
    The BRAD Group must meet on a regular monthly basis and at other times the
Principals Representative determines.(e)
    
    The Principals Representative must:
 (i)
    
    convene and chair all meetings of the BRAD Group;(ii)
    
    take minutes of all meetings held by the BRAD Group;(iii)
    
    provide a copy of those minutes to the Service Contractors
Representative who must, if he or she accepts them as accurate, notify the
Principals Representative as soon as practicable of their acceptance (upon
which notification such minutes become the official record of the relevant
meeting);(iv)
    
    if the Service Contractors Representative disagrees with those
minutes, discuss and amend the minutes to reflect the agreed position (upon
which amendment such minutes become the official record of the relevant
meeting); and(v)
    
    give to the BRAD Group members a copy of those minutes if the
minutes are accepted by the Service Contractors Representative under clause
14.1(e)(iii), or are agreed by the Principals Representative and the Service
Contractors Representative under clause 14.1(e)(iv).
 14.2
    
    Reporting obligationsThe Service Contractor must:
 (a)
    
    at least 5 days prior to each regular monthly meeting of the BRAD Group provide
a written report to the Principals Representative, in a form approved by the
Principals Representative, setting out:
 (i)
    
    the progress of the execution of the Services against the
Blasting Services Program;(ii)
    
    the results of testing undertaken to establish performance of
the Services against the Explosives Performance Standards;
 27.




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(iii)
    
    details of any activities which are behind the progress
required by the Blasting Services Program;(iv)
    
    strategies implemented or proposed to overcome problems and
delays, included in the performance of the Services;(v)
    
    the average number of the Service Contractor s and any
subcontractors employees on the Mine for that month;(vi)
    
    any foreseen delays to future activities on the Blasting Services Program;(vii)
    
    a summary of all Variation Information Requests and Variations;(viii)
    
    the status of all activities on which work is being undertaken;(ix)
    
    details of all subcontractors currently engaged or proposed to
be engaged by the Service Contractor;(x)
    
    details of daily (including the monthly) staff levels of the
Service Contractor and all subcontractors on the Mine including all activities,
locations and hours of work of those staff;(xi)
    
    details of safety-related issues including the following:
 (A)
    
    any incidence of occupational diseases;(B)
    
    the total number of first aid incidents;(C)
    
    the total number of cases requiring medical
treatment;(D)
    
    the total number of causes causing loss of time
of one or more full shift, subsequent to the incident;(E)
    
    duration of lost time injuries;(F)
    
    the total number of near misses; and(G)
    
    any other information required by the Principals
Representative;
 (xii)
    
    details of issues related to the environment;(xiii)
    
    evidence of compliance with the quality management requirements of this
Contract;(xiv)
    
    expenditure against predicted cash flow and budget;(xv)
    
    industrial relations issues affecting or which may affect Services; and(xvi)
    
    any other matters required by the Principals Representative;
 (b)
    
    provide to the Principals Representative within a reasonable time of being
requested to do so any information in connection with the Services which the
Principals Representative reasonably requires;(c)
    
    advise the Principals Representative (in writing if the Principals
Representative requires and within the time specified by the Principals
Representative) of suitable courses of action in relation to matters raised in BRAD
Group meetings; and(d)
    
    establish and maintain any records and registers which the Principals
Representative reasonably requires.
 14.3
    
    Records on MineThe Contractor must keep a readily available copy of the following:
 (a)
    
    one complete set of this Contract;(b)
    
    a complete marked-up set of the latest version of all schedules to this
Contract (showing all changes made to the schedules existing at the date of this
Contract);
 28.




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(c)
    
    the maintenance records of the Explosives kept by the Contractor arising out of
the execution of the Services; and(d)
    
    all notices, instructions or other information issued by the Principals
Representative to the Contractor,
  15.
    
    RELEASES AND INDEMNITIES15.1
    
    ReleaseThe Service Contractor releases the Principal Indemnified Parties from any liability or
obligation to the Service Contractor (or any person claiming through or on behalf of the
Service Contractor) in respect of:
 (a)
    
    physical loss of or damage to any real or personal property; or(b)
    
    personal injury, disease or illness to, or death of, persons,
  15.2
    
    Indemnity by the Service ContractorThe Service Contractor indemnifies the Principal Indemnified Parties against all damage,
expense (including lawyers fees and expenses on a solicitor/client basis), loss (including
financial loss) or liability of any nature suffered or incurred by the Principal Indemnified
Parties (including any claims made by third parties) arising out of the provision of (or
failure to provide) the Services and any other obligation under this Contract including but
not limited to:
 (a)
    
    physical loss of or damage to property of the Principal or to the property of
third parties; and(b)
    
    damage, expense, loss or liability in respect of personal injury, disease,
illness or death,
 caused by the Service Contractors breach of this Contract or its negligent act or omission.15.3
    
    Indemnity not subordinateThe Service Contractors liability to indemnify the Principal under clause 15.2 is a primary
obligation and is not the same as or subordinate to any other indemnity to which the
Principal is entitled.15.4
    
    Indemnity by the PrincipalThe Principal indemnifies the Service Contractor against all damage, expense (including
lawyers fees and expenses on a solicitor/client basis), loss (including financial loss) or
liability of any nature suffered or incurred by the Service Contractor (including any claims
made by third parties) arising out of but not limited to:
 (a)
    
    physical loss of or damage to property of the Service Contractor or to the
property of third parties; and(b)
    
    damage, expense, loss or liability in respect of personal injury, disease,
illness or death,
  15.5
    
    No indirect or Consequential LossNotwithstanding any other provision of this Contract, no party shall be liable to another
party for any indirect or consequential loss.
 29.




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For the purposes of this clause, indirect or consequential loss includes all special loss,
loss of income, loss of profit, costs incurred in responding to, investigating, managing or
settling all claims made by or on behalf of third parties in respect of the matters
specifically excluded, and all claims for loss of goodwill, loss of, or impairment to,
reputation or loss of opportunity including opportunities to enter into or complete
arrangements with third parties.16.
    
    RISK OF LOSS OR DAMAGE AND INSURANCE16.1
    
    Responsibility for care of Explosives and Principal Supplied Items
 (a)
    
    The Service Contractor is responsible for:
 (i)
    
    the care of any item of Explosives; and(ii)
    
    the care of the Principal Supplied Items from when the
Principal makes the Principal Supplied Items available to the Service
Contractor under clause 12.1 to the expiration of the Contract.
 (b)
    
    The Service Contractor uses the Explosives and Principal Supplied Items at its
own risk.(c)
    
    The Service Contractor must promptly make good loss from, or damage to, any
item of Explosives and any part of the Mine while it is responsible for its care.
 16.2
    
    Service Contractors insurance
 The Service Contractor must maintain the following insurance with a reputable insurer from
the Commencement Date until the End Date:
 (a)
    
    public liability and product liability insurance to the amount in the
Particulars in respect of accidental damage or loss to any property and accidental
injury (including death) to any person arising out of the performance of the Services;(b)
    
    workers compensation insurance as required under workers compensation
legislation;(c)
    
    plant and equipment insurance in respect of loss of or damage to equipment used
in the provision of the Services (other than motor vehicles but including the
Explosives) owned or leased by the Service Contractor to its full replacement value at
the time loss or damage occurs;(d)
    
    comprehensive motor vehicle insurance for the market value of all motor
vehicles which are used by the Service Contractor in connection with the Services; and(e)
    
    third party motor insurance required to comply with the Law in respect of all
motor vehicles which are used by the Service Contractor in connection with the
Services.
 16.3
    
    Protection of people and property
 (a)
    
    The Service Contractor must take all measures necessary to protect people and
property on or adjacent to the Mine (except as contemplated in the Blasting Services
Program from time to time).(b)
    
    If the Service Contractor or its employees, subcontractors or agents damage
property (except as contemplated in the Blasting Services Program), the Service
Contractor must promptly make good the damage and pay any compensation which the Law
and the common law requires the Service Contractor to pay.
 16.4
    
    SubcontractorsThe Service Contractor must ensure that each of its subcontractors:
 (a)
    
    before commencing any of the Services takes out insurance referred to in
clause 16.2, sufficient to protect the interests of the Principal, the Service
 30.




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Contractor and all of the subcontractors for the matters referred to in clause 16.2 in
so far as they relate to the Services to be performed by the subcontractor; and(b)
    
    maintains that insurance for the period provided for in clause 16.2.
 16.5
    
    NotificationIf the Service Contractor receives notice of cancellation, amendment or non-renewal of any
policy it must immediately:
 (a)
    
    advise the Principal; and(b)
    
    renew the policy, if necessary with another insurer.
 16.6
    
    Extension to the PrincipalThe insurances referred to in clause 16.2(a) and (c) must extend to include the Principal as
an insured noting the Principals interest.16.7
    
    Evidence requiredThe Service Contractor must produce on demand by the Principal sufficient evidence that the
insurances required under clauses 16.2 and 16.4 have been effected and are current. If the
Service Contractor fails to do so, the Principal may itself affect the insurance. The cost
of doing so and maintaining such insurance will be a debt due from the Service Contractor to
the Principal.17.
    
    FORCE MAJEURE17.1
    
    Notice and suspension of obligationsIf a party to this Contract is affected, or likely to be affected, by a Force Majeure Event:
 (a)
    
    that party must immediately give the other prompt notice of that fact
including:
 (i)
    
    full particulars of the Force Majeure Event;(ii)
    
    an estimate of its likely duration;(iii)
    
    the obligations affected by it and the extent of its effect on
those obligations; and(iv)
    
    the steps taken to rectify it; and
 (b)
    
    the obligations under this document of the party giving the notice are
suspended to the extent to which they are affected by the relevant Force Majeure Event
as long as the Force Majeure Event continues.
 17.2
    
    Effort to overcomeA party claiming a Force Majeure Event must use its best endeavours to remove, overcome or
minimise the effects of that Force Majeure Event as quickly as possible. This does not
require a party to settle any industrial dispute in any way that it considers inappropriate.17.3
    
    Alternative supplyDuring any period in which a party to this document is not performing obligations because of
a claimed Force Majeure Event, the other party may (but need not) make alternative
arrangements for the performance, whether by another person or otherwise, of any obligation
which the party claiming the Force Majeure Event is not performing without incurring any
liability to that party.
 31.




---



##### 



17.4
    
    Termination
 (a)
    
    If a Force Majeure Event continues for more than 90 days, either party may
terminate this Contract by giving at least 15 days notice to the other party.(b)
    
    In the event of termination under paragraph (a), neither party is liable to the
other except to the extent of rights or obligations which accrued before the
termination. If those accrued rights or obligations result in the unjust enrichment of, or unjust
detriment to, one party, the parties will negotiate in good faith to ensure a fair
allocation of loss or gain as between the parties.
  18.
    
    DEFAULT AND TERMINATION18.1
    
    The Principals remedy notice
 (a)
    
    If the Principal considers that the Service Contractor is in breach of this
Contract, the Principal may give the Service Contractor:
 (i)
    
    a written notice specifying a reasonable date by which the
Service Contractor must rectify the breach to the extent that the breach is
capable of rectification; or(ii)
    
    if the breach is incapable of rectification, a written notice
specifying the Principals requirements to overcome or cure the effects of that
breach and prevent the breach from recurring (Cure Plan).
 (b)
    
    If the Principal gives the Service Contractor a written notice referred to in
clause 18.1(a), the Service Contractor must comply with the written notice within the
time stated in the notice.(c)
    
    The Principal may terminate the Contract by notice in writing to the Service
Contractor if:
 (i)
    
    the Service Contractor fails to rectify the breach or effect
the Cure Plan, as the case may be, in accordance with and in the time stated in
the terms of a written notice referred to in clause 18.1(a);(ii)
    
    the Service Contractor commits the same breach again;(iii)
    
    a breach incapable of rectification was a Material Breach.
 (d)
    
    The Service Contractor must pay the Principal the loss, costs and damages
suffered by the Principal as a consequence of a breach of the Contract by the Service
Contractor.(e)
    
    The Service Contractor will be in Material Breachif it is in breach of a
material term of the Contract including:
 (i)
    
    failing to proceed in an orderly manner having regard to the
duration and sequence of activities in accordance with the Blasting Services
Program, in breach of clause 6.1;(ii)
    
    fails to continue to hold any necessary licences or approvals
required to provide the Services;(iii)
    
    fails to comply with a safety requirement or a direction from
the Principal in relation to safety in relation to any safety matter which is
of a significant nature;(iv)
    
    failing to comply with clause 4.3;
 32.




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##### 



(v)
    
    failing to comply with a direction of the Principals
Representative under clause 3.1, in breach of clause 3.1(d);(vi)
    
    failing to provide evidence of insurance, in breach of clause
16.7; or(vii)
    
    failing to achieve or perform the Services in accordance with
the Explosives Performance Standards.
 18.2
    
    Termination for insolvencyEither party may terminate this Contract, with immediate effect, by written notice to the
other party if the other party is Insolvent.18.3
    
    Consequence of termination under clause 18.1(c)and clause 18.2If the Principal gives the Service Contractor a written notice to terminate pursuant to
clause 18.1(c) or clause 18.2, the damages which would be payable had the Service Contractor
repudiated the Contract and the Principal had terminated the Contract shall be a debt due
from the Service Contractor to the Principal and the Service Contractor must:
 (a)
    
    cease the execution of the Services within the time specified in the written
notice; and(b)
    
    ensure that the Mine is left in a safe condition and the Explosives are
properly secured.
 18.4
    
    Change in control of Service ContractorIf the Service Contractor ceases to be a subsidiary of any holding company:
 (a)
    
    the Service Contractor must notify the Principal providing details of the
change; and(b)
    
    in any event, the Principal has the right to terminate this Contract by notice
to the Service Contractor.
 18.5
    
    Termination of the Product Supply ContractIf the Product Supply Contract is terminated for any reason, either party may terminate this
Contract by providing written notice to the other party (without prejudice to the rights of
the parties accrued at the time of giving notice).19.
    
    DISPUTE RESOLUTION19.1
    
    Procedure for resolving disputes
 (a)
    
    The parties agree that all disputes (other than disputes where relief is sought
for urgent injunctive or declaratory relief) relating to or arising out of this
Contract or the Services must be resolved in accordance with this clause 19.(b)
    
    If a dispute arises then either party may give notice to the other party which
notice must:
 (i)
    
    be in writing;(ii)
    
    state that it is a notice under this clause 19.1; and(iii)
    
    include or be accompanied by reasonable particulars of the
dispute.
 (c)
    
    If a notice is given under clause 19.1(b), then a representative of each of the
parties who has capacity to reach a binding agreement must meet at least once within 30
Business Days of receipt of the notice under clause 19.1(b) (or such other time as the
parties may agree in writing) and use reasonable endeavours acting in good faith to
resolve the dispute.(d)
    
    If the dispute is not resolved by the representatives within the period
referred to in clause 19.1(c), the executive officer having the position in the
Particulars for each
 33.




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##### 



of the parties must meet at least once within 15 Business Days of
the meeting under clause 19.1(c) and use reasonable endeavours acting in good faith to
resolve the dispute.(e)
    
    If the dispute is not resolved by the executives within the period referred to
in clause 19.1(d), the dispute must be resolved by arbitration in accordance with the
ACICA Arbitration Rules. The seat of the arbitration will be Brisbane, Australia,
and the language of the arbitration will be English.(f)
    
    The parties agree that the arbitration award is binding and final upon both
parties if the amount determined by the arbitrator in the award is not higher than
$150,000.00.
 19.2
    
    Dispute resolution not to delay execution of the ServicesNotwithstanding the other provisions of this clause 19, the Service Contractor must:
 (a)
    
    proceed without delay to continue to provide the Services;(b)
    
    perform its other obligations under this Contract; and(c)
    
    comply with all directions of the Principals Representative including any
direction in respect of a dispute or difference being dealt with in accordance with
clause 19.
 20.
    
    MEDIA RELEASES AND CONFIDENTIALITY20.1
    
    Media release
 (a)
    
    Neither party must advertise or issue any information, publication, document or
article for publication or media releases or other publicity relating to the Services,
this Contract or the Principals business and activities without the prior written
approval of the other party, other than to comply with ASX listing requirements.(b)
    
    The Service Contractor must refer to the Principal any enquiries from the media
concerning the Services or the Principals business and activities.(c)
    
    The Service Contractor must not, and must ensure that its employees and its
subcontractors and their respective employees do not, take any photographs or video
recording of the Services, without the prior written approval of the Principals
Representative.
 20.2
    
    ConfidentialityEach party must not, and must ensure that its employees and subcontractors do not, without
the prior written approval of the other party, either during the Term or after the End Date,
disclose or give to any person any Confidential Information other than as required by any
Law or in compliance with the listing requirements of any share market.20.3
    
    Reproduction and return Documentation
 (a)
    
    The Service Contractor must ensure that all information supplied to it by the
Principal in relation to the Services, the Documentation, and anything recording,
containing, setting out, or making reference to the Services, are used, copied,
supplied or reproduced only for the purposes of providing the Services and its other
obligations under this Contract unless it has obtained the prior written approval of
the Principals Representative.(b)
    
    Except to the extent expressly approved in writing by the Principals
Representative, the Service Contractor must on, or as soon as practicable after the End
Date:
 (i)
    
    deliver up to the Principals Representative; or(ii)
    
    at the option of the Principals Representative destroy,
 34.




---



##### 



21.
    
    NOTICES21.1
    
    How to give a noticeWithout limiting the means by which service may be affected on a company pursuant to the
Companies Act, a notice, consent or other communication under this Contract is only
effective if it is:
 (a)
    
    (written) in writing, signed by or on behalf of the person giving it;(b)
    
    (addressed) addressed to the person to whom it is to be given; and(c)
    
    (sent) given as follows:
 (i)
    
    (mail) delivered or sent by pre-paid mail (by airmail, if the
addressee is overseas) to that persons address; or(ii)
    
    (fax) sent by fax to that persons fax number and the machine
from which it is sent produces a report that states that it was sent in full.
 21.2
    
    When a notice is givenA notice, consent or other communication that complies with this clause is regarded as given
and received:
 (a)
    
    if any of the requirements of section 436(i) of the Companies Act apply, when
those requirements are satisfied;(b)
    
    (fax delivery) if it is delivered or sent by fax, on the day following the day
on which it was sent; or(b)
    
    (mail delivery) if it is sent by mail, 5 days after it is posted.
 21.3
    
    Address for noticesA persons address and fax number are those set out in the Particulars, or as the person
notifies the sender.22.
    
    AMENDMENT AND ASSIGNMENT22.1
    
    AmendmentThis Contract can only be amended, supplemented, replaced or novated by another document
signed by the parties.22.2
    
    Assignment
 (a)
    
    (Consent required to assign) A party may only dispose of, declare a trust over
or otherwise create an interest in its rights under this Contract with the written
consent of the other party.(b)
    
    (No consent required) Notwithstanding clause 21.2(a), the Principal may freely
assign this Contract to any related body corporate without consent of the Service
Contractor.
 23.
    
    GENERAL23.1
    
    Governing law
 (a)
    
    (law) This Contract is governed by the law in force in Papua New Guinea.(b)
    
    (jurisdiction) Each party submits to the non-exclusive jurisdiction of the
courts exercising jurisdiction in Papua New Guinea, and any court that may hear appeals
from any of those courts, for any proceedings in connection with this Contract, and
waives any right it might have to claim that those courts are an inconvenient forum.
 35.




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##### 



23.2
    
    Liability for expensesEach party must pay its own expenses incurred in negotiating, executing, stamping and
registering this Contract.23.3
    
    Giving effect to this ContractEach party must do anything (including execute any document), and must ensure that its
employees and agents do anything (including execute any document), that the other party may
reasonably require to give full effect to this Contract.23.4
    
    Parent Company Guarantee
 (a)
    
    Clause 23.4(b) applies if and only if the Particulars state that the Service
Contractor is required to comply with clause 23.4(b).(b)
    
    The Service Contractor must, on or before the date of this Contract:
 (i)
    
    procure the Service Contractors ultimate parent company to
execute the Parent Company Guarantee; and(ii)
    
    give the Principal a copy of the Parent Company Guarantee duly
executed by the Service Contractors ultimate parent company.
 (c)
    
    The Service Contractor shall have no Entitlement to any payment unless and
until the duly executed Parent Company Guarantee is provided in accordance with this
clause 23.4.
 23.5
    
    Waiver of rightsA right may only be waived in writing, signed by the party giving the waiver, and:
 (a)
    
    (conduct) no other conduct of a party (including a failure to exercise, or
delay in exercising, the right) operates as a waiver of the right or otherwise prevents
the exercise of the right;(b)
    
    (one occasion) a waiver of a right on one or more occasions does not operate as
a waiver of that right if it arises again; and(c)
    
    (further exercise) the exercise of a right does not prevent any further
exercise of that right or of any other right.
 23.6
    
    Operation of this Contract
 (a)
    
    (rights preserved) Any right that the Principal may have under this Contract is
in addition to, and does not replace or limit, any other right that the Principal may
have.(b)
    
    (severance) Any provision of this Contract which is unenforceable or partly
unenforceable is, where possible, to be severed to the extent necessary to make this
Contract enforceable, unless this would materially change the intended effect of this
Contract.
 23.7
    
    Operation of indemnities
 (a)
    
    (survive termination) Each indemnity in this Contract survives the expiry or
termination of this Contract.(b)
    
    (recovery) A party may recover a payment under an indemnity in this Contract
before it makes the payment in respect of which the indemnity is given.
 36.




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##### 



23.8
    
    ConsentsWhere this Contract contemplates that the Principal may agree or consent to something
(however it is described), the Principal may:
 (a)
    
    (discretion) agree or consent, or not agree or consent, in its absolute
discretion; and(b)
    
    (conditions) agree or consent subject to conditions,
  23.9
    
    Inconsistency with other documentsIf this Contract is inconsistent with any other document or agreement between the parties,
this Contract prevails to the extent of the inconsistency.23.10
    
    CounterpartsThis Contract may be executed in counterparts.23.11
    
    AttorneysEach person who executes this Contract on behalf of a party under a power of attorney
declares that he or she is not aware of any fact or circumstance that might affect his or
her authority to do so under that power of attorney.
 37.




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##### 



SCHEDULE 1
 ADDITIONAL CONDITIONS
 Tax Exemptions
     Third Party Introductions
  Payments
  www.bsp.com.pg/resources/exchange_rates.htm
 Option to Purchase Equipment
 Equipment Offe
   38.




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##### 



Termination For Reasons Other Than Cause
 (a)
    
    Notwithstanding any other provision of this Contract, if:
 (i)
    
    in the Principals reasonable opinion, the continuation of
mining operations at the Mine is not economically viable and the Principal no
longer requires the Services (or any similar services);(ii)
    
    after consultation with the Service Contractor, the Principal
makes the decision to move to a contract mining model and the contractor
selected to deliver mining services no longer requires the Services to be
provided by the Service Contractor; or(iii)
    
    a material change in control of the Principal occurs,
   (i)
    
    a change in the executive management of the Principal following
the acquisition of greater than 25% of the issued capital of the Principal by a
third party;(ii)
    
    the acquisition, by a third party, or greater than or equal to
51% of the issued capital of the Principal; or(iii)
    
    any significant divestment of business interests by the
Principal.
 (b)
    
    If this Contract is terminated pursuant to the above additional condition 5(a),
the Principal shall pay the Service Contractor:
 (i)
    
    the value of the Services executed by the Service Contractor to
the date of termination;(ii)
    
    except to the extent already covered by a payment under
sub-clause (i) above, the cost of materials or products ordered for the
Services to the extent the Service Contractor cannot cancel such orders
provided that:
 (A)
    
    upon payment by the Principal, the unencumbered
title to the materials or products passes to the Principal; and(B)
    
    the materials or products have not been
prematurely ordered;
 (iii)
    
    the demobilisation cost set out in Schedule 6; and(iv)
    
    less the amount of any money which is due or which may become
due from the Service Contractor to the Principal in respect of this Contract or
the Services and amounts already paid to the Service Contractor in respect of
the Contract.
 (c)
    
    Except to the extent set out in the above additional condition 5(b), the
Service Contractor shall have no entitlement as a consequence of termination,
(including any consequential costs, losses or damages, loss of profits or loss of
opportunity).
 6.
    
    Commencement Date6.1.
    
    Target DateSubject to additional condition clause 6.2, the Service Contractor
must use its best endeavours to commence providing the Services on or
before                 .
 39.




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##### 



6.2
    
    Revised DateOn          the Service Contractor must provide written
notice to the Principal of a revised fixed Commencement Date between
the dates of          and          (inclusive). In providing
the revised fixed Commencement Date, the Service Contractor must use
its best endeavours to commence providing the Services as close as
possible to         .6.3
    
    Commencement Date earlier thanIf the Commencement date is earlier
than         then the
Principal must pay the Service Contractor in accordance with the
following:
 (i)
    
    For a Commencement Date between         and          (inclusive), an
amount of(ii)
    
    For a Commencement Date between          and         (inclusive), an
amount of(iii)
    
    For a Commencement Date between          and         (inclusive), an
amount of
 6.4
    
    Commencement Date later than                         but on or beforeIf the Commencement date is later than          but on or before         then the Service Contractor must pay
the Principal in accordance with the following:
 (i)
    
    For a Commencement Date between          and          (inclusive),
an amount of
 6.5
    
    Commencement Date afterIf the Commencement Date is later
than        , then the Service Contractor must
pay the Principal an amount of         per month (adjusted on a pro-rata basis for
partial months) from          until the Commencement Date.6.6
    
    Complete statement of entitlementsThe amounts set out in this clause represent the Principals genuine pre-estimate of the
loss it will suffer should the Service Contractor fail to commence providing the Services in
accordance with this clause or the gains it will make if the Service Contractor commences
providing the services earlier.Other than as set out in this Contract, neither party shall have any right to seek
additional compensation specifically in relation to the Commencement Date other than in
accordance with this clause.
 40.




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##### 



SCHEDULE 2
 SCOPE OF WORK
 Services
   
    
    Ordering of Products (on behalf of the Principal pursuant to the Products Supply Contract)
and consumables to maintain agreed minimum and maximum stock levels, as set out below:
  LeadStock Levels
    
    
    Lead Time
    
    
    Lead Time
    
    
    TimeMin
    
    
    Max
    
    
    ex Lae
    
    
    ex Australia
    
    
    ex USASurface Delays
    
    FireX TLPrimaFireDetonating Cord
    
    Fireline 8/40 RDX LSFireline P8HTBooster
    
    Trojan 400Powermite ThermoLead in Lines
    
    FireX Starter
  Stock Levels
    
    
    Lead TimeMin
    
    
    MaxAmmonium Nitrate Prill
 
    
    Storage, protection, security and correct usage of the Products.
    
    Dip and record drill hole depths, temperatures and any hole irregularities. Frequency of
measurement and timing to be stipulated by the Service Contractors technical team
non-conformance of hole to design are to be reported immediately to the Principals
Representative.
    
    Deliver product to the bench, pump Explosives into blast holes, record all loading
information.
 41.




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##### 




    
    Stem blast holes; tie in, guard and blast shot as directed by the Principals
Representative. The Service Contractor will supply up to four blast-guards with additional
requirements being supplied by the Principal. Stemming aggregate will be supplied by the
Principal and delivered to the bench for use by the Service Contractor.
    
    Deliver blast report to the Principal no later than 24hr after the blast.
   (a)
    
    the quality of the bench conditions, such that MPU movement is not hindered and
where the blast crew have reasonable underfoot conditions without excessive mud or
water impairing the efficiency of the task;(b)
    
    the blast area having a maximum cycle time of 45 minutes (MPU measured at safe
speeds); and(c)
    
    the blastholes being 229 mm in diameter and the bench height being 12m with 1m
of subdrill and 5m of stemming.
        
    
    any required special installation and commissioning tools;
 42.




---



##### 




    
    any required special maintenance tools;
 
    
    any items or tools required for handling the Explosives; and blast cones and signs to
delineate the blast area.
 
    
    operation and maintenance manuals and other documentation.
 The Service Contractor must provide:
 
    
    technical assistance and support to their operations on Mine that allow their process to be
continuously improved; and
 
    
    transport between the Mine camp and the mine for its personnel (outside of usual bus
transportation provided by the Principal).
   
    
    Initiation design;
 
    
    Fragmentation analysis; and
 
    
    Vibration assessment.
       Explosives
  43.




---



##### 



Services Performance Standards
              REFERENCE INFORMATION
  
    
    Material movement figures (BCM) for the 5 year contract period. (Indicative Only)
 Year
    
    2007
    
    2008
    
    2009
    
    2010
    
    2011Very-Soft material
    
    
    1,402,216
    
    
    
    1,747,932
    
    
    
    2,250,383
    
    
    
    819,528
    
    
    
    5,956,970Soft material
    
    
    16,075,362
    
    
    
    6,358,372
    
    
    
    10,568,886
    
    
    
    408,191
    
    
    
    3,684,152Medium material
    
    
    6,417,157
    
    
    
    6,029,883
    
    
    
    8,477,175
    
    
    
    9,229,110
    
    
    
    2,231,360Hard material
    
    
    3,981,631
    
    
    
    5,850,376
    
    
    
    5,757,399
    
    
    
    11,044,535
    
    
    
    6,761,704Total to blast
    
    
    27,876,367
    
    
    
    19,986,562
    
    
    
    27,053,842
    
    
    
    21,501,364
    
    
    
    18,634,186
 44.




---



##### 




    
    Explosive consumption figures for the 5 year contract period.
 Estimated Bulk Tonnes of
    
    Estimated total holes toYear
    
    explosives
    
    charge20072008200920102011
 TECHNICAL CRITERIA
      Schedule 10
 Equipment List.
   PERFORMANCE TESTING
   45.




---



##### 



VOD
   46.




---



##### 



QUALITY MEASURES
  (a)
    
    melting down of ammonium nitrate (AN) to make an aqueous oxidizer solution;Melting of AN is performed in a stainless steel vessel fitted with heat exchangers and
mechanical agitation. The required quantity of water is added to the tank using a batch
controller and raised to the desired temperature by steam passing through the heat
exchangers, with solid AN and other trace ingredients added to the tank via a screw auger.(b)
    
    blending of diesel with various emulsifiers to make the fuel phase; andFuel phase is blended in a tank fitted with batch controllers and mechanical agitation and
then stored for future use, all at ambient temperature.(c)
    
    forming of an emulsion.Emulsion is blended as required by passing the oxidizer and fuel phases through a propriety
blender and heat exchanger before being stored at ambient temperature for future use.;
  1.
    
    pH, specific gravity and crystallisation point of the oxidizer solution;2.
    
    viscosity and temperature;3.
    
    line and pump pressures and temperatures; and4.
    
    blender and pump RPM.
      47.




---



##### 



(a)
    
    the dissolution of oxidiser solids shall be performed to achieve a crystallisation point of
56oC +/- 1 oC, as assurance that additional water is not being added
either intentionally or inadvertently.(b)
    
    The hot cup viscosity of the emulsion matrix, as measured with a Brookfield RV viscometer
will be 25,000  28,000 cps (spindle 7 @ 20 rpm), as assurance that the correct proportions of
ingredients have been used.(c)
    
    As a further check, density of the emulsion matrix shall be 1.36 g/cc +/- 0.1 g/cc.
   Excluded Services
  (a)
    
    retrieval of the hole savers from the outside of the blast pattern;(b)
    
    Blast designs and hole explosive quantities, and exclusion zones;(c)
    
    Periodic repair of surface area.;(d)
    
    transportation of supplies from the Principals wharf to the explosives
magazine or the manufacturing compounds;(e)
    
    security to the compound, lay down yard or magazine.
 Key Personnel
   Pre-Contract Information
 Principals Employment Policy
 Contractors personnel Plan
 Contractors CI plan
 Manufacturing process description
 Project mobilisation time line
 Contractor site equipment list
 48.




---



##### 



Mine information including Mine Access Road
  OHSE Plan
    Mine Procedures
  49.




---



##### 



Magazine layout
 
 Mine pit dimensions and magazine layout diagrams  see attached.
 50.




---



##### 



SCHEDULE 3
 SAFETY PRINCIPLES
  51.




---



##### 



SCHEDULE 4
 DRAWINGS AND SPECIFICATIONS
  52.




---



##### 



SCHEDULE 5
 PROGRAM OF WORKS
 Blasting Services Execution Plan
 Approved Build Schedule
            1.
    
    Service Contractors procedures:
 (a)
    
    Ordering of stock;(b)
    
    Magazine storage;(c)
    
    Emulsion manufacturing;(d)
    
    Emulsion quality;(e)
    
    Emulsion storage; and(f)
    
    Temperature logging and dipping of blast holes.
 2.
    
    Service Contractors Work Instructions:
 (a)
    
    Bulk truck operations;(b)
    
    Transporting emulsion to bench;(c)
    
    Magazine stock control;(d)
    
    On bench delineation of blast pattern;(e)
    
    Removal of hole savers and stacking outside blast pattern;(f)
    
    Loading of blast holes;(g)
    
    Tie-ing and guarding of shot;
 53.




---



##### 



(f)
    
    Blast clearance zones; and(g)
    
    Blast guarding.
  (a)
    
    Blasting at Principal site(b)
    
Calculating exclusion zones at Principal site;(c)
    
    Working in PGOA at Principal site;(d)
    
    Firing a blast at Principal site;(e)
    
    Inspection of blasts at Principal site;(f)
    
    Clearance of blast at Principal site; and(g)
    
    Reporting of blast incidents at Principal site.
 Blasting Services Program
   1.
    
    Service Contractors daily program of Blasting Services:
 (a)
    
    Meeting in production operations building for shift instructions
to commence at 5:15am.(b)
    
    Service Contractor to have arrived at charging pattern by 5:30am.(c)
    
    Service Contractor will be given I.E tie in plans by 6:00am.(d)
    
    Production meeting at 8:30am to discuss blast schedule and
exclusion zones and guarding.(e)
    
    The Service Contractor will contact the drill and blast
superintendent with blast update by 11.00am.(f)
    
    The Service Contractor will blast on schedule at time determined
at the 5:15am meeting.(g)
    
    The Service Contractor will have no more than 40 minutes to blast
and clear the shot for continued production.(h)
    
    Hole logging and dipping of next blast may be done at anytime upon
the area becoming available.(i)
    
    The Service Contractor must provide the Principal with the logging
results immediately after the pattern has been logged.(j)
    
    The Service Contractor must provide the Principal with blast
reports within 24 hours of the blast clearance.(k)
    
    The Service Contractor must provide the daily manufacturing and
pumping quantities to the Principals drill and blast engineers at the
5.15am meeting the following morning.(l)
    
    The Service Contractor must be present at the shift change meeting
in the operations office at 5:15pm.
 2.
    
    Meetings
 54.




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##### 



(a)
    
    Pre-planning and weekly review meetings every Monday at 2:30pm in
the Operations conference room.(b)
    
    Weekly planning meetings every Wednesday at 2:30pm in the
Operations conference room.(c)
    
    Weekly review meetings every Friday at 2:30pm in the Drill and
Blast Superintendents office, to report and discuss the following
points.
 (i)
    
    Safety
 
    
    incidents
    
    accidents
    
    misfires
    
    blast results
 (ii)
    
    Production
 
    
    blast times
    
    blast volumes
    
    sleep times
 (iii)
    
    Opportunities for improvement
 
    
    sleep times
    
    product quality
    
    information flow from Principal
 (iv)
    
    Stock
 
    
    Volumes on Mine
    
    Volumes in transit
    
    expected arrival times of transit stock
    
    consumption rates and stock inventory
 (v)
    
    Quality
 
    
    measurements taken
    
    variations to technical data sheets
    
    stemming heights
    
    impact to Mine
 (vi)
    
    Maintenance schedule
 (d)
    
    Monthly Business Review and Development (BRAD) meetings.(e)
    
    Monthly Business Performance Scorecard meetings.(f)
    
    Monthly OHAS management plan and business partners OHAS meetings.
 55.




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SCHEDULE 6
 CONTRACT PRICE
 PART A  Price Table (Fixed Labour and Management Costs)
 Cost
    
    Depreciation#
    
    Type
    
    Number
    
    A$ per month
    
    % per annum1.
    
    
    Fixed Costs
    
    
    12.
    
    
    Labour Costs
    
    
    13.
    
    
    Management Costs
    
    
    1Subtotal4.
    
    
    Mobilisation *
    
    
    15.
    
    
    De-mobilisation
    
    
    1
 
 *
    
    Payable on successful commissioning of the Contractors trucks and constructional plant Part B  Price Table (Variable Costs)
 Cost/unitTemperature Regime
    
    #
    
    Unit
    
    (A$/ea)Cold (20-70°) 
Sleep 12 hrs
    
    
    6.
    
    
    Gassed Bulk Emulsion
tonne
    
    per metric
tonneModerate (70-100°) 
Sleep 8 hrs
    
    
    7.
    
    
    GMB Bulk Emulsion tonne
    
    per metric
tonneHot (100-130°) 
Sleep 8 hrs
    
    
    8.
    
    
    GMB Bulk Emulsion tonne
    
    per metric
tonne
  Part C  Rise and Fall
 Explosives rise and fall adjustments
  56.




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SCHEDULE 7
 DELAY COSTS AND DAYWORKS RATES
 Standby Rates
 Daywork Rates
 Cost/unitType
    
    A$/day/unitShot-firersBlast CrewProcess WorkersBulk Drivers
 57.




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SCHEDULE 8
 PRINCIPAL SUPPLIED ITEMS
 PRODUCTS
 
    
    ammonium nitrate;
    
    initiating explosives;
    
    packaged explosives; and
    
    such other items as supplied under the Product Supply Contract.
 OTHER
   MINE FACILITIES
 
    
    Main power (and backup power);
    
    Water  potable water for personnel and process water consistent with dnx minimum
specifications for manufacture;
    
    Diesel;
    
    A fenced (and surfaced to SSAN standards) compound on the Principals Mine;
    
    Freight for all items from Lihir Wharf (including unloading any vessels) to the Service
Contractors magazine, lay-down yard and manufacturing facility as required by the Service
Contractor;
    
    Total storage area for 100 x 24ft AN containers (comprising space for AN containers located
outside the compound and also the space designated for AN containers inside the compound).
    
    Emergency fire fighting equipment (in additional to the Service Contractors own fire
fighting equipment); and
    
    Storm tracking devices.
 ACCOMMODATION
 
    
    One three bedroom house will be supplied within the Principals town site for use by the
Service Contractor;
    
    Daily return transport from the town site to the mine site;
    
    The agreed fly in fly out positions and Lihirian workforce will be provided with single
accommodation with all meals included.
 58.




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##### 



SCHEDULE 9
 FORM OF PARENT COMPANY GUARANTEE
 DATE
 PARTIES
 1.
    
    Dyno Nobel Asia Pacific Ltd ABN 38 003 269 010 of Level 20, 111 Pacific Highway, North Sydney
NSW 2060, Australia (Guarantor)2.
    
    Lihir Gold Limited ARBN 069 803 998 of Level 7, Pacific Place, Corner of Musgrave Street and
Champion Parade, Port Moresby, National Capital District, PNG (Principal)
 BACKGROUND
 A.
    
    The Principal and dnx Papua New Guinea (Service Contractor) have entered into an Explosives
Service Contract dated on or about the date of this Deed (Contract).B.
    
    The Principal has entered into the Contract conditionally upon the Guarantor signing this
Deed.
 OPERATIVE PROVISIONS
 1
    
    GUARANTEE OF PERFORMANCE1.1
    
    The Guarantor guarantees to the Principal the due and punctual performance of every legal,
equitable, contractual, statutory or other duty, undertaking, warranty, guarantee, indemnity,
covenant, agreement or other obligation on the part of the Service Contractor which at any
time arises under or in connection with the Contract, including without limitation:
 (a)
    
    any obligation on the part of the Service Contractor to pay the Principal any
costs under the Contract;(b)
    
    the performance of the Services (as defined in the Contract); and(c)
    
    any obligation arising from any variation to the Contract:
 (i)
    
    agreed between the Service Contractor and the Principal; or(ii)
    
    made in accordance with the Contract;
  Service Contractors Obligations
 2
    
    INDEMNITY FOR LOSS2.1
    
    The Guarantor indemnifies the Principal and agrees at all times to keep the Principal
indemnified from and against all damages, costs, losses, expenses and liabilities which the
Principal may suffer or incur due to the Service Contractors Obligations not being performed,
observed or fulfilled and the Guarantor agrees that the indemnity given by the Guarantor under
this clause:
 (a)
    
    is a separate and additional obligation of the Guarantor under this Deed;(b)
    
    is given by the Guarantor as a principal indemnifier and not as a surety;(c)
    
    is given on the other terms of this Deed (with all necessary changes being
made) so far as those other terms can apply.
 3
    
    CONTINUING GUARANTEE AND INDEMNITY3.1
    
    This Deed is a continuing obligation and security and is not to be considered as wholly or
partially satisfied or discharged by the payment at any time or times hereafter of any sum
 59.




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or sums of money for the time being due to the Principal under
the Contract or by any settlement of account or any other matter
or thing whatsoever but extends to cover and be security for all
sums of money at any time due to the Principal despite any
special payment, settlement of account or other matter or thing
whatsoever.
 4
    
    LIABILITY NOT DISCHARGED BY OTHER EVENTS4.1
    
    The liability of the Guarantor and the rights of the Principal under this Deed are not
affected by:
 (a)
    
    any neglect or omission to enforce such rights;(b)
    
    the liquidation or administration of the Contractor;(c)
    
    the termination or cancellation, of the Contract in whole or in part;(d)
    
    any other act, matter or thing which under the law relating to sureties would
or might but for this provision release the Guarantor from its obligations hereunder or
any part thereof.
 5
    
    GOVERNING LAW5.1
    
    This Deed and any matter arising in connection with it is governed by the laws of Queensland,
Australia and the parties submit to the non-exclusive jurisdiction of the Courts of that
State.6
    
    PARTIES SUCCESSORS AND ASSIGNS6.1
    
    References in this Deed to the Guarantor, the Principal and the Service Contractor are taken
to include their respective successors and assigns.7
    
    LIMITATION OF LIABILITY7.1
    
    At all times, the extent of the Guarantors liability under this Deed is limited to the
liability owed by the Service Contractor to the Principal under the Contract.
 EXECUTED
 EXECUTEDby Dyno Nobel Asia Pacific
Limitedin accordance with section 127 of
the Corporations Act 2001(Cth) in thepresence of:Signature of directorSignature of witnessSignature of director/secretaryName of witness  please printAddress of witness
 EXECUTEDby Lihir Gold Limitedby 
its duly authorised representative:Signature of witness
    
    Signature of authorised representativeName
    
    Name
 60.




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##### 



SCHEDULE 10
 TRAINING, EMPLOYMENT AND COMMUNITY CONDITIONS
  1.
    
    The Service Contractor shall comply with The Principals training and localisation program by
using local Lihirian Labour whenever possible and economically justified. Where necessary the
Service Contractor shall provide required training.2.
    
    If the project worksite is outside of the Process Plant and Mine Areas, then it is a
requirement that the Service Contractor will maximise the employment of Lihirians from the
area where the work is to be carried out with a minimum of two (2) at each worksite. The local
employees will be recruited and employed under the Service Contractors recruitment and
employment policy.
 
    
    The Principals Community Liaison Department can provide details of the landowner
group(s) in the work areas, and will provide assistance in contacting and arranging
personnel interviews, etc.
    
    While the Principal will provide contact with the landowner personnel, it will be solely
up to the Service Contractor as to who they employ based on the personnel nominated being
capable of carrying out their work tasks in a safe and efficient manner. The personnel
employed are to be engaged on a temporary direct hire basis.
    
    These nominated personnel will at all times be subject to all aspects of the Service
Contractors workplace policy and procedures, up to and including termination should any
breach warrant.
    
    The Service Contractor will, at all times, be fully responsible for these workers with
their required PPE, tools, etc and all other items that could reasonably be expected to be
provided by a responsible employer.
    
    The Service Contractor will be required to maintain these personnel on their books for
the duration of their presence at the worksite given satisfactory performance and are
encouraged to maintain their employment at additional worksites as available.
 3.
    
    Wherever possible, the Service Contractor shall control and manage the Principals exposure
to risks associated with community concerns directly related to the Services. Where
necessary, the Service Contractor shall employ an officer with the specific responsibility of
managing community related risks and interests.4.
    
    The Principal is committed to a policy which protects the human rights of employees and local
communities.5.
    
    The Service Contractor shall comply with this policy, and where applicable, provide evidence
of appropriate human rights awareness and training.6.
    
    The Principals objective is to establish and maintain mutually beneficial long-term
relations with the Lihir Community based on reciprocal respect and trust.
  61.




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##### 



SCHEDULE 11
 EQUIPMENT LIST
 Item
    
    QTYEMULSION STORAGEEmulsion Tank 70t (55,000L) vertical
    
    
    2INCLUSIONSWilden Pump Loading System
    
    
    4Emulsion Loading Hoses and fittings
    
    
    2Pipework and Valves
    
    
    2Oxidiser StorageAN Solution Tank ISO Container 20000L
    
    
    2Level Indication AN Storage Tank
    
    
    2Oxidiser production pump 50mm VSD
    
    
    1Flow Switches
    
    
    1Suction Filters for Meltdown
    
    
    2Flow Meter
    
    
    1Piping Valving
    
    
    2Agitators & Gearbox for mixing solution in tank
    
    
    1Ladders Walkways
    
    
    1Emulsion Blend AreaProcess Module Skid in Container
    
    
    1Cooling Tower and pump
    
    
    1Pipework and Valves
    
    
    1Heat exchanger
    
    
    1Fuel Phas Heat Exchanger
    
    
    1Earthing
    
    
    1Lighting
    
    
    1Process water, pumps and inst/piping
    
    
    1Signs
    
    
    1Oxidiser Meltdown areaMeltdown Building
    
    
    1Tanks augurs,electrical, lump breaker, agitator
    
    
    1Area Lighting  includes cabling
    
    
    1Caustic acid dosing tank, pumps and pipes
    
    
    1Transfer pump from melt tanks to oxidiser storage
    
    
    2DIESEL STORAGETranstank diesel storage Unit
    
    
    1INCLUSIONSFlow Switches and Metres
    
    
    1Transfer Pumps (included emulsifier transfer and diesel to blend tank)
    
    
    2Instrumentation
    
    
    1Production Pump
    
    
    1Ladder and walkway
    
    
    1Electrical and Controls
    
    
    1Piping and Valving
    
    
    1
 62.




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##### 



Item
    
    QTYGASSINGTrace Chemical Container
    
    
    1Gassing Chemicals storage
    
    
    3INCLUSIONSPower connection  cabling from service container
    
    
    1EXTRASTrace Chemical IBC
    
    
    1Trace Chemical IBC shed
    
    
    1MAINTENANCE BAYShed frame & roof
    
    
    1Workshop Container  Includes tools
    
    
    1Site Services Container
    
    
    1Flammable Goods Cabinet
    
    
    1General Storage Container
    
    
    2INCLUSIONSCompressor & Drier
    
    
    1Water Pump (dual)
    
    
    1Generator / Mains Hook up
    
    
    1Site Sub Boards
    
    
    1Spill Kit
    
    
    2Oil separator pit and grating
    
    
    1Oil separator
    
    
    1EXTRASBackup Generator
    
    
    1Area Lighting and cabling
    
    
    1GENERALFire Extinguishers
    
    
    6Signs
    
    
    1Water Tank
    
    
    2Hoses and fittings
    
    
    1Radios, VHF
    
    
    9Radios, Handheld
    
    
    10Shot firers tools & Signs
    
    
    1Loading Pad Oil Sep
    
    
    1Equipment Hire EWP
    
    
    1Crane Hire General work
    
    
    1CALIBRATION & QCTote Bin 1000 kg
    
    
    1Emulsion Calibration Bin 1000kg
    
    
    1Fuel Calibration Drum 200 L
    
    
    1INCLUSIONSPlatform Scales, 0-2000kg
    
    
    1EXTRASRetainer sample cabinet
    
    
    1OFFICEOffice, Crib, ablutions and training, deck with cover
    
    
    1
 63.




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##### 



Item
    
    QTYElectrical container including MCC
    
    
    1INCLUSIONSIce Machine
    
    
    1Water Cooler
    
    
    1Furniture
    
    
    1Crib room  fridge/microwave
    
    
    1Locks and Tags and Board
    
    
    1Phones/
    
    
    1Photo copier/fax/scanner/printer
    
    
    1First Aid cabinet
    
    
    1VOD Equipment
    
    
    1Data Loggers
    
    
    2EXTRASComputer and Printer
    
    
    1Communication Equipment (Includes Sat Dish etc)
    
    
    1Installation of Equipment
    
    
    1On site materials
    
    
    1Safety Showers and associated piping
    
    
    1Lab Equipment
    
    
    1Lab 6 Mtr Container
    
    
    1Concrete Works
    
    
    1InfrastructureInterconnecting services
    
    
    1VEHICLESLight VehiclesLight truck
    
    
    1Shot Firers Ute with boxes
    
    
    2Troopie
    
    
    3Plant VehiclesStandard Forklift
    
    
    1Stemming loader
    
    
    2TrucksCat TTT Artic Unit
    
    
    2
 64.




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##### 



EXECUTEDas an agreement.EXECUTEDby Lihir Gold Limitedby itsduly authorised representative:Signature of witness
    
    Signature of authorised representativeName
    
    NameEXECUTEDby dnx Papua New Guinea
Limitedby its duly authorised
representative:Signature of witness
    
    Signature of authorised representativeName
    
    Name
 65.