Document:

Exhibit 10.15

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

ISA Contract for Exploration

Public Information Template

 

		Type of resource: Polymetallic Nodules
	Name of Contractor: Nauru Ocean Resources Inc.
	Contract Start: July 22, 2011
	Sponsoring State: Republic of Nauru	Contract End: July 22, 2026
	Location: 4 Areas in the Clarion-Clipperton Zone of the Pacific Ocean

 

     

    

    

 

CONTENTS

 

	Introduction	1
	 	 	 
	1.	Contract Information	1
	 	 	 
	2.	Coordinates and Illustrative Chart of the Exploration Area	2
	 	 	 
	3.	Plan of Work (approved by Council)	4
	 	 	 
	4.	Programme of Activities and Exploration Expenditure	5
	 	 	 
	5.	Training Programme	9
	 	 	 
	6.	Standard clauses	13

 

    i

    

    

 

Introduction

 

The information contained in this ISA Contract
for Exploration – Public Information Template is made available to the public in response to the request by the Council of the ISA
to make contracts publicly available, subject to restrictions on confidential information, industrial secrets and proprietary data.

 

The content of the present template is in accordance
with the Regulations on Prospecting and Exploration for [Polymetallic Nodules in the Area] [ISBA/19/C/17] (the “Regulations”).

 

		1.	Contract Information

 

Annex III of the Regulations.

 

	Type of resource	Polymetallic Nodules
	Name of Contractor	Nauru Ocean Resources Inc.
	Contract Start	July 22, 2011
	Contract End	July 22, 2026
	Location	4 Areas in the Clarion-Clipperton Zone of the Pacific Ocean
	Contract Area (km2)	74,830

 

    1/28

    

    

 

		2.	Coordinates and Illustrative Chart of the Exploration Area

 

Schedule 1 of Annex III of the Regulations.

 

Exploration area located between

 

Area A (8,924 Km2)

 

	 	 	Latitude	 	Longitude
	 	 	 	 	 
	 	 	13.0000 N	 	Longitude -134.583 W (the point of commencement)
	 	 	 	 	 
	Then to	 	13.0000 N	 	-134.250 W
	 	 	 	 	 
	Then to	 	12.5000 N	 	-134.250 W
	 	 	 	 	 
	Then to	 	12.5000 N	 	-134.250 W
	 	 	 	 	 
	Then to	 	12.1933 N	 	-134.067 W
	 	 	 	 	 
	Then to	 	12.1933 N	 	-134.067 W
	 	 	 	 	 
	Then to	 	11.5000 N	 	-133.833 W
	 	 	 	 	 
	Then to	 	11.5000 N	 	-133.833 W
	 	 	 	 	 
	Then to	 	12.0000 N	 	-134.377 W
	 	 	 	 	 
	Then to	 	12.0000 N	 	-134.377 W
	 	 	 	 	 
	Then to	 	13.0000 N	 	-134.583 W (being the point of commencement)

 

Area B (3,519 Km2)

 

	 	 	Latitude	 	Longitude
	 	 	 	 	 
	 	 	14.0000 N	 	-134.00000 W (the point of commencement)
	 	 	 	 	 
	Then to	 	14.0000 N	 	-133.25000 W
	 	 	 	 	 
	Then to	 	13.86670 N	 	-133.25000 W
	 	 	 	 	 
	Then to	 	13.86670 N	 	-133.20000 W
	 	 	 	 	 
	Then to	 	13.58010 N	 	-133.20000 W
	 	 	 	 	 
	Then to	 	13.58010 N	 	-133.83300 W
	 	 	 	 	 
	Then to	 	14.0000 N	 	-134.00000 W (being the point of commencement)

 

    2/28

    

    

 

Area C (37,227 Km2)

 

	 	 	Latitude	 	Longitude
	 	 	 	 	 
	 	 	14.9350 N	 	-122.1667 W (the point of commencement)
	 	 	 	 	 
	Then to	 	14.9350 N	 	-120.5000 W
	 	 	 	 	 
	Then to	 	14.5000 N	 	-120.5000 W
	 	 	 	 	 
	Then to	 	14.5000 N	 	-120.7500 W
	 	 	 	 	 
	Then to	 	14.3333 N	 	-120.7500 W
	 	 	 	 	 
	Then to	 	14.3333 N	 	-121.8330 W
	 	 	 	 	 
	Then to	 	14.0000 N	 	-121.8330 W
	 	 	 	 	 
	Then to	 	14.0000 N	 	-121.3330 W
	 	 	 	 	 
	Then to	 	13.6667 N	 	-121.3330 W
	 	 	 	 	 
	Then to	 	13.6667 N	 	-121.1670 W
	 	 	 	 	 
	Then to	 	12.0000 N	 	-121.1670 W
	 	 	 	 	 
	Then to	 	12.0000 N	 	-121.6000 W
	 	 	 	 	 
	Then to	 	12.6000 N	 	-121.6000 W
	 	 	 	 	 
	Then to	 	12.6000 N	 	-122.1670 W
	 	 	 	 	 
	Then to	 	12.8900 N	 	-122.1670 W
	 	 	 	 	 
	Then to	 	12.8900 N	 	-123.0000 W
	 	 	 	 	 
	Then to	 	13.3500 N	 	-123.0000 W
	 	 	 	 	 
	Then to	 	13.3500 N	 	-122.5000 W
	 	 	 	 	 
	Then to	 	13.5000 N	 	-122.5000 W
	 	 	 	 	 
	Then to	 	13.5000 N	 	-122.1667 W
	 	 	 	 	 
	Then to	 	14.9350 N	 	-122.1667 W (being the point of commencement)

 

Area D (25,160 Km2)

 

	 	 	Latitude	 	Longitude
	 	 	 	 	 
	 	 	11.08333 N	 	-117.816670 W (the point of commencement)
	 	 	 	 	 
	Then to	 	11.08333 N	 	-116.066667 W
	 	 	 	 	 
	Then to	 	9.89500 N	 	-116.066667 W
	 	 	 	 	 
	Then to	 	9.89500 N	 	-117.816670 W
	 	 	 	 	 
	Then to	 	11.08333 N	 	-117.816670 W (being the point of commencement)

 

    3/28

    

    

 

 

		3.	Plan of Work (approved by Council)

 

Summary of Plan of Work for Exploration including the Programme
of Activities for the first and/or the current 5-year period (Regulation 18).

 

NORI is currently in its second 5-year period of exploration.
In this period NORI plans to:

 

		(i)	Optimise the onshore processing and offshore production systems;

		(ii)	Commence a pre-feasibility study (PFS) to analyze technical and economic viability of the mining system and metallurgical process,
as well as verify capital and operating costs to a greater accuracy;

		(iii)	Identify the Collector Test site in the NORI Area;

		(iv)	Commence the environmental baseline studies pertaining to the Collector Test Environmental Impact Assessment (EIA) programme;

		(v)	Commence the geotechnical studies pertaining to the Collector Test programme;

		(vi)	Carry out metallurgical test work aimed at achieving better operating efficiencies of the process;

		(vii)	Carry out studies to identify potential sites for the process plant; and

		(viii)	Test the metallurgical process at pilot plant scale.

 

    4/28

    

    

 

		4.	Programme of Activities and Exploration Expenditure

 

Section 1of Annex IV of the Regulations and Schedule 2 of
Annex III of the Regulations.

 

		I.	Agreed 5-year Programme of Activities

 

	5-year Programme of Activities	Second 5-Year Period
	General Objectives	Objective	Description
	 	Optimise the onshore processing and offshore production systems	
    Metallurgical studies will be aimed at reducing costs and increasing
    revenue streams. The metallurgical process flow sheet will continue to be refined, and further metallurgical test work will be carried
    out aimed at achieving better operating efficiencies of the process and confirm that processing can be undertaken without generating solid
    waste streams.

     

    Further design work for the offshore system is necessary with the aim
    of better defining CAPEX and OPEX as well as decreasing production and operating risks.

	 	Commence a pre- feasibility study	To improve upon the technical and economic feasibility of the project the priority is to focus on carrying out further engineering studies. Optimizing the technical solution for the offshore production system and
	 	Identify the Collector Test site	Identification and ground truthing of areas potentially suitable for the Collector Test, which will provide important engineering and environmental data
	 	Commence the environmental baseline studies pertaining to the Collector Test EIA programme	These baseline studies will play an important role in carrying out the Collector Test EIA in order to study impacts of the Collector
	 	Commence the geotechnical studies pertaining to the Collector Test programme	These studies will feed in to both the engineering design for the Collector as well as the overall environmental programme
	 	Carry out metallurgical test work aimed at achieving better operating efficiencies of the process. Studies will also be carried out to identify potential sites for the process plant	Work will be carried out to improve metal recovery from the metallurgical process, as well as to identify sites best suited for location of the processing plant.
	 	Test the metallurgical process at pilot plant scale	This pilot plant testing will be critical to verify the process at a larger scale and on a semi continuous basis.

 

    5/28

    

    

 

		II.	Results achieved during reported year (#): [year]

 

	Annual objectives and activities
	Year	No.	Agreed Objectives	Objective: Completed, Modified, Postponed or Replaced
	2017	6	Investigate the requirements for upgrading part of the NORI Resource to a higher 2017resource category	Completed. NORI carried out a study to determine the sampling technique and sampling frequency required for upgrading the NORI Inferred Resource to an Indicated Resource.
	 	 	 	 
	 	 	Survey cruise planning	
    Completed. NORI finalized the preparation for a cruise to NORI
    Area D, scheduled to mobilize in 2018. This work involved determining which areas in NORI Area D to focus the 2018 Cruise work, as well
    as determining the requirements for upgrading part of the NORI Area D Resource to a higher resource category (i.e. from inferred to indicated).
    This work in 2017 enabled NORI to finalize the program for the 2018 Cruise, the objectives of which are to:

    1)      Collect
    data required to select the site for the future Seafloor Polymetallic Nodule Collector Test and thus the location for environmental studies;

    2)      Commence
    undertaking sampling to support an indicated resource for a project life of 30 years of production; and

    3)      Collect
    high-resolution imagery and bathymetry of the seafloor to support engineering studies.

	 	 	 	 
	 	 	Refinement of NORI Area D site selection	Completed. In 2017 NORI made a final decision on which areas in NORI Area D to focus the 2018 Cruise work. Four sites were selected. The 2018 Cruise will then focus its efforts on those sites, and collect data required to select the site within those four sites for the future Seafloor Polymetallic Nodule Collector Test and thus location for the environmental studies.
	 	 	 	 
	 	 	Offshore system engineering studies	Completed. Preparatory work for the Pre-Feasibility Study (PFS) phase continued. Technical reviews were conducted and the proposed PFS work-scope was optimised and matured. A Technology Readiness Level (TRL) review exercise and a Basis of Design (BOD) exercise was also carried out
	 	 	 	 
	 	 	Onshore metallurigical process studies	Completed. In 2017 development of a process to produce final metal products from polymetallic nodules was advanced. The metallurgical process was progressed through activities such as benchmarking of the technology against possible alternatives and monitoring the markets for products, in particular the continued emergence of a market for Ni, Co, Cu and Mn in the batteries and other emerging clean energy technologies. . Decision was made to evaluate an alternative flowsheet.

 

    6/28

    

    

 

	Annual objectives and activities
	Year	No.	Agreed Objectives	Objective: Completed, Modified, Postponed or Replaced
	2018	7	Cruise to NORI Area D	
    Completed. All cruise objectives were met. The cruise resulted
    in:

     

    (i) successful delineation of
collector test site; 

    (ii) delineation of two potential
Preservation Reference Zones; and 

    (iii) sampling
    to upgrade the resource estimate and geological model.

     

	 	 	Update the NORI Area Geological Model and Resource Estimate to Incorporate the results of the 2018 Cruise	Completed. An updated resource statement based on the results of the 2018 cruise was compiled.
	 	 	 	 
	 	 	Carry out planning for a subsequent cruise to obtain bulk samples of polymetallic nodules necessary for larger scale metallurgical process studies	Completed. In 2018 market engagement was carried out seeking the optimal collection methodology to obtain the bulk samples required for metallurgical and engineering purposes.
	 	 	 	 
	 	 	Process and interpret data from the 2018 Cruise	Completed. Resource samples were analysed and resource estimates carried out. Sediment environmental samples were analysed and report completed.
	 	 	 	 
	 	 	Produce a 3-D / 4-D interactive computer model of the offshore system	Completed. A state-of-the-art virtual reality simulator of the offshore system was developed. The simulator is fully immersive and provides a technically realistic 4D (i.e., 3D visuals plus real-time control) experience of interacting with the offshore system. The VR Simulator is a dimensionally accurate and representation of the system in which components (vessel, sea, risers, current, vehicles, seabed, nodules) all interact in a physically realistic manner. Key components can be adjusted, in order to simulate both individual and system-wide responses, and scenarios can be played out.
	 	 	 	 
	 	 	Continue investigations in to commencing long-term environmental studies, including with respect to installing long oceanographic moorings and seasonal studies including conductivity, temperature, depth (CTD) profiles, and sampling of water, plankton and fish.	Completed. The development of the mooring design for the long-term oceanographic studies was completed, aimed at commencing NORI’s physical and chemical oceanography program. This will be a key component of the environmental baseline studies required to support the NORI Area D Environmental Impact Assessment as well as providing key data to refine engineering designs. A tender process was initiated to secure a contractor to conduct the met ocean work on Campaign 4a.

 

    7/28

    

    

 

	Annual objectives and activities
	Year	No.	Agreed Objectives	Objective: Completed, Modified, Postponed or Replaced
	2019	8	Cruises to NORI Area	
    Completed. NORI conducted three offshore campaigns in 2019,
    which were all carried out safely with no significant health, safety or environmental incidents

     

    The first two campaigns, 6A (August 19- October 3) and 6B (November
    10 - December 21) were focused on delineating the resource and collecting biological samples and key geotechnical data. A total of 213
    box cores were collected during the two campaigns and eight gravity cores.

     

    Three moorings were deployed in October 2019 to initiate physical and
    chemical oceanography studies. Two benthic-focused arrays in each of the two PRZs were deployed and a 4000 m long array (500 m depth –
    seafloor) due west of the test mining area was also deployed. Five repeat hydrography stations for detailed spatiotemporal chemical oceanography
    studies were also established during the mooring campaign.

     

    Strategic benthic biological samples (megafauna, macrofauna, meiofauna,
    microfauna) were collected from 213 box cores in NORI Area D during two campaigns in June and November. Approximately 8,200 biological
    samples were preserved for later analysis and use by the scientific community; More than 300 sediment chemistry samples were also collected.

     

	 	 	Update Preliminary Economic Assessment	Completed. In 2019 the PEA was completed with Economic Assessment associated cost reductions and risk profile improvements of the new flowsheet.
	 	 	 	 
	 	 	Continue offshore system engineering and onshore process engineering work	Completed. The offshore engineering programme advanced significantly in 2019 with signing of collector test contract with Allseas. Concept selection was completed and a significant program of component testing; collectors, tracks, sensors and particle flow behavior was completed. The onshore process engineering work, involved Benchscale production of metal alloy, and site selection benchmarking and identification of several sites which meet or exceed the PEA assumptions. Identification and concept development of an alternate processing scenario was also carried out.

 

    8/28

    

    

 

		III.	Actual and direct exploration expenditures during reported year [#]: [year]

 

	 	Anticipated annual expenditure	Actual and direct exploration expenditures	Comments
	Year 6 (2017)	US$1 Million	US$3,716,541	 
	Year 7 (2018)	US$1 Million	US$11,553,123	Expenditure was increased due to the cruise and subsequent analysis of the results.
	Year 8 (2019)	US$1 Million	US$14,956,072	Expenditure was increased due to the 3 cruises conducted in 2019.

 

		5.	Training Programme

 

Schedule 3 of Annex III of the Regulations.

 

		I.	2012-2016 Training Programme

 

	Type of Training	At sea exploration training programme

(4 opportunities)	Fellowship programme (2 opportunities)	Engineering training programme

(2 opportunities)
	Institutions	Training opportunity will be provided by NORI and its contractors	University of Hawaii, University of the South Pacific, Imperial College	NORI’s engineering department or contractor
	Duration	Dependent on at-sea cruise length	5 months	4 - 6 weeks
	Scope	Geological exploration, geophysical survey or environmental baseline studies	Graduate training based on the candidates educational background	Assist with NORI’s offshore engineering programme
	Fields	Marine geology, geophysics, marine environment, oceanography	Marine, biology/ecology/environment	Engineering
	Qualification required	Undergraduate or Masters degree in a relevant degree such as marine geology, geophysics, marine environment, oceanography	Bachelor degree in science marine, biology/ecology/environment or an equivalent education	Bachelor or Masters degree in mechanical, electrical, mining or marine engineering
	Financing	NORI will cover all costs associated with the training opportunity	NORI will cover all costs associated with the training opportunity	NORI will cover all costs associated with the training opportunity

 

    9/28

    

    

 

		II.	2017-2021 Training Programme

 

	Type of Training	At sea exploration training programme

(4 opportunities)	Fellowship programme (2 opportunities)	Engineering training programme

(2 opportunities)
	Institutions	Training opportunity will be provided by NORI and its contractors	Training opportunity will be provided by NORI and its environmental contractors	Not specified
	Duration	Dependent on at-sea cruise length	4 – 5 days	Not specified
	Scope	Geological exploration, geophysical survey or environmental baseline studies	Participation in technical and stakeholder workshops to plan and discuss NORI’s environmental social impact assessment programme	Support relevant research to the seafloor minerals industry
	Fields	Marine geology, geophysics, marine environment, oceanography	Marine, biology/ecology/environment	Environmental science, engineering or geology
	Qualification required	Undergraduate or Masters degree in a relevant degree such as marine geology, geophysics, marine environment, oceanography	Bachelor degree in science marine, biology/ecology/environment or an equivalent education	Bachelor or Masters degree
	Financing	NORI will cover all costs associated with the training opportunity	NORI will cover all costs associated with the training opportunity	NORI will cover all costs associated with the training opportunity

 

    10/28

    

    

 

		III.	Trainings conducted up to 2019

 

	Start Year	End Year	Name of Trainee	Nationality	Gender	Type of Programme	Details	Duration
	2012	2016	Mr. Sankey Deluckner	Nauruan	Male	Educational – University of South Pacific, Fiji	Undergraduate degree in engineering	4 years
	2012	2015	Ms Marlaina Aroi	Nauruan	Female	Educational – University of South Pacific, Fiji	Undergraduate degree in environmental science – did not complete	3 years
	2013	2013	Dody Darmawan	Indonesian	Male	At-sea	Geophysical survey & nodule sampling	October 2013
	2014	2014	Dody Darmawan	Indonesian	Male	Cruise report writing	Trainee assisted with cruise report writing	March 2014
	2015	2015	Ms Renee McDonald	Jamaica	Female	Environmental Workshop	Participation in workshop	11 - 12 Dec 2015
	2015	2015	Bamidele Oresajo of Nigeria.	Nigeria	Male	Environmental Workshop	Visa denied to enter UK	11 – 12 Dec 2015
	2019	2019	Aganze Baciyunjuze Gloire	Congo	Male	At-sea	Exploration & biological cruise – box core and gravity cores	23 August -1 October
	2019	2019	Lucia Villar Munoz	Chile	Female	At-sea	Metocean, seasonal study campaign & deployment of 3 environmental monitoring moorings	9-23 October
	2019	2019	Raphel Di Carlo Silva dos Santos	Brazil	Male	At-sea	Metocean, seasonal study campaign & deployment of 3 environmental monitoring moorings	9-23 Oct.
	2020	2020	Matheus Bose	Brazil	Male	Environmental Workshop	Environmental Workshop	3-6 February
	2020	2020	Troy Franklin	Jamaica	Male	Environmental Workshop	Environmental Workshop	3-6 February
	2020	2020	Sereima Koli	Fiji	Female	Environmental Workshop	Environmental Workshop	3-6 February
	2020	2020	Bamidele Oresajo	Nigeria	Male	Environmental Workshop	Denied VISA to the US, so unable to attend	3-6 February
	2020	2020	Toluwanimi Victory Afolayan	Nigeria	Female	Environmental Workshop	Denied VISA to the US, so unable to attend	3-6 February
	2020	2020	Titie Afuhia Kaufusi	Tonga	Male	At-sea	Nodule bulk sampling campaign	
    6 January -

    6 February

 

    11/28

    

    

 

Training Notes:

 

		1)	NORI is currently in discussions with the ISA to amend the 5-month fellowship training opportunity from its 2012 – 2016 training
programme. NORI in conjunction with the University of the South Pacific (USP) would like to offer a scholarship for a student interested
in pursuing a Master’s Degree Programme in Marine Management, Biology, Environmental Science, Marine Science or Earth Sciences.
In addition to supporting the student complete their Master’s programme, NORI will also offer the successful applicant the opportunity
to participate in a NORI offshore campaign during their studies or following the completion of their Programme. NORI will also offer the
successful applicant access to NORI staff if the applicant is interested in researching a topic related to polymetallic nodules.

 

		2)	NORI’s engineering training opportunity from its 2012-2016 training programme was delayed to better align the training opportunity
with NORI’s offshore engineering programme. This delay will now allow two engineering students to assist with the engineering and
development of NORI’s nodule collection system. Unfortunately, no candidates applied for the 4-6 week internship when it was advertised
in early 2020. NORI and ISA agreed to re-advertise the opportunity in the hopes of attracting candidates.

 

		IV.	Completed Trainings per Year

 

	 	At Sea	Engineering Training	Fellowship Programme	Environmental Workshop	Study / Research relating to seafloor minerals and the environment
	Year 2

(2013)	1 training opportunity offered – include cruise report writing in 2014	 	 	 	 
	Year 4

(2015)	 	 	 	2 training opportunities offered (NORI Env Workshop)	 
	Year 5

(2016)	 	 	 	 	2 training opportunities offered (University of South Pacific)
	Year 8

(2019)	3 training opportunities offered	 	 	 	 
	Year 9

(2020)	5 training opportunities scheduled	2 Training opportunities advertised for 2020	Revised training opportunity under consideration by ISA	4 Training opportunities scheduled for Feb. 2020	 
	Year 10

(2021)	 	 	 	 	Planned for 2021

 

    12/28

    

    

 

		6.	Standard clauses

 

Annex IV of the Regulations.

 

STANDARD CLAUSES FOR EXPLORATION CONTRACT

 

SECTION
1

DEFINITIONS

 

1.1 In
the following clauses:

 

(a) “Exploration
area” means that part of the Area allocated to the Contractor for exploration, described in schedule 1 hereto, as the same may be
reduced from time to time in accordance with this contract and the Regulations;

 

(b) “Programme
of activities” means the programme of activities which is set out in schedule 2 hereto as the same may be adjusted from time to
time in accordance with sections 4.3 and 4.4 hereof;

 

(c) “Regulations”
means the Regulations for Prospecting and Exploration for Polymetallic Nodules in the Area, adopted by the Authority.

 

1.2 Terms
and phrases defined in the Regulations shall have the same meaning in these standard clauses.

 

1.3 In
accordance with the Agreement relating to the Implementation of Part XI of the United Nations Convention of the Law of the Sea of 10 December
1982, its provisions and Part XI of the Convention are to be interpreted and applied together as a single instrument; this contract and
references in this contract to the Convention are to be interpreted and applied accordingly.

 

1.4 This
contract includes the schedules to this contract, which shall be an integral part hereof.

 

SECTION
2

SECURITY OF TENURE

 

2.1 The
Contractor shall have security of tenure and this contract shall not be suspended,

 

terminated or revised except in accordance with
sections 20, 21 and 24 hereof.

 

2.2 The
Contractor shall have the exclusive right to explore for polymetallic nodules in the exploration area in accordance with the terms and
conditions of this contract. The Authority shall ensure that no other entity operates in the exploration area for a different category
of resources in a manner that might unreasonably interfere with the operations of the Contractor.

 

    13/28

    

    

 

2.3 The
Contractor, by notice to the Authority, shall have the right at any time to renounce without penalty the whole or part of its rights in
the exploration area, provided that the Contractor shall remain liable for all obligations accrued prior to the date of such renunciation
in respect of the area renounced.

 

2.4 Nothing
in this contract shall be deemed to confer any right on the Contractor other than those rights expressly granted herein. The Authority
reserves the right to enter into contracts with respect to resources other than polymetallic nodules with third parties in the area covered
by this contract.

 

SECTION
3

CONTRACT TERM

 

3.1 This
contract shall enter into force on signature by both parties and shall remain in force for a period of fifteen years thereafter unless:

 

(a) The
Contractor obtains a contract for exploitation in the exploration area which enters into force before the expiration of such period of
fifteen years; or

 

(b) The
contract is sooner terminated,

 

provided that the term of the contract may be
extended in accordance with sections 3.2 and 17.2 hereof.

 

3.2 Upon
application by the Contractor, not later than six months before the expiration of this contract, this contract may be extended for periods
of not more than five years each on such terms and conditions as the Authority and the Contractor may then agree in accordance with the
Regulations. Such extensions shall be approved if the Contractor has made efforts in good faith to comply with the requirements of this
contract but for reasons beyond the Contractor’s control has been unable to complete the necessary preparatory work for proceeding
to the exploitation stage or if the prevailing economic circumstances do not justify proceeding to the exploitation stage. 3.3 Notwithstanding
the expiration of this contract in accordance with section 3.1 hereof, if the Contractor has, at least 90 days prior to the date of expiration,
applied for a contract for exploitation, the Contractor’s rights and obligations under this contract shall continue until such time
as the application has been considered and a contract for exploitation has been issued or refused.

 

SECTION
4

EXPLORATION

 

4.1 The
Contractor shall commence exploration in accordance with the time schedule stipulated in the programme of activities set out in schedule
2 hereto and shall adhere to such time periods or any modification thereto as provided for by this contract.

 

    14/28

    

    

 

4.2 The
Contractor shall carry out the programme of activities set out in schedule 2 hereto. In carrying out such activities the Contractor shall
spend in each contract year not less than the amount specified in such programme, or any agreed review thereof, in actual and direct exploration
expenditures.

 

4.3 The
Contractor, with the consent of the Authority, which consent shall not be unreasonably withheld, may from time to time make such changes
in the programme of activities and the expenditures specified therein as may be necessary and prudent in accordance with good mining industry
practice, and taking into account the market conditions for the metals contained in polymetallic nodules and other relevant global economic
conditions.

 

4.4 Not
later than 90 days prior to the expiration of each five-year period from the date on which this contract enters into force in accordance
with section 3 hereof, the Contractor and the Secretary-General shall jointly undertake a review of the implementation of the plan of
work for exploration under this contract. The Secretary-General may require the Contractor to submit such additional data and information
as may be necessary for the purposes of the review. In the light of the review, the Contractor shall indicate its programme of activities
for the following five-year period, including a revised schedule of anticipated yearly expenditures, making such adjustments to its previous
programme of activities as are necessary. Schedule 2 hereto shall be adjusted accordingly.

 

SECTION
5

ENVIRONMENTAL MONITORING

 

5.1 The
Contractor shall take necessary measures to prevent, reduce and control pollution and other hazards to the marine environment arising
from its activities in the Area as far as reasonably possible using the best technology available to it.

 

5.2 The
Contractor shall, in accordance with the Regulations, gather environmental baseline data as exploration activities progress and develop
and shall establish environmental baselines against which to assess the likely effects of the Contractor’s activities on the marine
environment.

 

5.3 The
Contractor shall, in accordance with the Regulations, establish and carry out a programme to monitor and report on such effects on the
marine environment. The Contractor shall cooperate with the Authority in the implementation of such monitoring.

 

5.4 The
Contractor shall, within 90 days of the end of each calendar year, report to the Secretary-General on the implementation and results of
the monitoring programme referred to in section 5.3 hereof and shall submit data and information in accordance with the Regulations.

 

    15/28

    

    

 

5.5 Prior
to the commencement of testing of collecting systems and processing operations, the Contractor shall submit to the Authority:

 

(a) A
site-specific environmental impact statement based on available meteorological, oceanographic and environmental data collected during
the preceding phases of exploration and containing data that could be used to establish an environmental baseline against which to assess
the likely effect of the mining tests;

 

(b) An
assessment of the effects on the marine environment of the proposed tests of collecting systems;

 

(c) A
proposal for a monitoring programme to determine the effect on the marine environment of the equipment that will be used during the proposed
mining tests.

 

SECTION
6

CONTINGENCY PLANS AND EMERGENCIES

 

6.1 The
Contractor shall, prior to the commencement of its programme of activities under this contract, submit to the Secretary-General a contingency
plan to respond effectively to incidents that are likely to cause serious harm to the marine environment arising from the Contractor’s
activities at sea in the exploration area. Such contingency plan shall establish special procedures and provide for adequate and appropriate
equipment to deal with such incidents and, in particular, shall include arrangements for:

 

(a) The
immediate raising of a general alarm in the area of the exploration activities;

 

(b) Immediate
notification to the Secretary-General;

 

(c) The
warning of ships which might be about to enter the immediate vicinity;

 

(d) A
continuing flow of full information to the Secretary-General relating to particulars of the contingency measures already taken and further
actions required;

 

(e) The
removal, as appropriate, of polluting substances;

 

(f) The
reduction and, so far as reasonably possible, prevention of serious harm to the marine environment, as well as mitigation of such effects;

 

(g) As
appropriate, cooperation with other contractors with the Authority to respond to an emergency; and

 

(h) Periodic
emergency response exercises.

 

    16/28

    

    

 

6.2 The
Contractor shall promptly report to the Secretary-General any incident arising from its activities that has caused or is likely to cause
serious harm to the marine environment. Each such report shall contain the details of such incident, including, inter alia:

 

(a) The
coordinates of the area affected or which can reasonably be anticipated to be affected;

 

(b) The
description of the action being taken by the Contractor to prevent, contain, minimize and repair the serious harm to the marine environment;

 

(c) A
description of the action being taken by the Contractor to monitor the effects of the incident on the marine environment; and

 

(d) Such
supplementary information as may reasonably be required by the Secretary-General.

 

6.3 The
Contractor shall comply with emergency orders issued by the Council and immediate measures of a temporary nature issued by the Secretary-General
in accordance with the Regulations, to prevent, contain, minimize or repair serious harm to the marine environment, which may include
orders to the Contractor to immediately suspend or adjust any activities in the exploration area.

 

6.4 If
the Contractor does not promptly comply with such emergency orders or immediate measures of a temporary nature, the Council may take such
reasonable measures as are necessary to prevent, contain, minimize or repair any such serious harm to the marine environment at the Contractor’s
expense. The Contractor shall promptly reimburse the Authority the amount of such expenses. Such expenses shall be in addition to any
monetary penalties which may be imposed on the Contractor pursuant to the terms of this contract or the Regulations.

 

SECTION
7

OBJECTS OF AN ARCHAEOLOGICAL OR HISTORICAL NATURE

 

The Contractor shall immediately
notify the Secretary-General in writing of any finding in the exploration area of an object of an archaeological or historical nature
and its location. Following the finding of any such object of an archaeological or historical nature in the exploration area, the Contractor
shall take all reasonable measures to avoid disturbing such object.

 

SECTION
8

TRAINING

 

8.1 In
accordance with the Regulations, the Contractor shall, prior to the commencement of exploration under this contract, submit to the Authority
for approval proposed training programmes for the training of personnel of the Authority and developing States, including the participation
of such personnel in all of the Contractor’s activities under this contract.

 

8.2 The
scope and financing of the training programme shall be subject to negotiation between the Contractor, the Authority and the sponsoring
State or States.

 

    17/28

    

    

 

8.3 The
Contractor shall conduct training programmes in accordance with the specific programme for the training of personnel referred to in section
8.1 hereof approved by the Authority in accordance with the Regulations, which programme, as revised and developed from time to time,
shall become a part of this contract as schedule 3.

 

SECTION
9

BOOKS AND RECORDS

 

The Contractor shall keep a complete and proper
set of books, accounts and financial records, consistent with internationally accepted accounting principles. Such books, accounts and
financial records shall include information which will fully disclose the actual and direct expenditures for exploration and such other
information as will facilitate an effective audit of such expenditures.

 

SECTION
10

ANNUAL REPORTS

 

10.1 The
Contractor shall, within 90 days of the end of each calendar year, submit a report to the Secretary-General covering its programme of
activities in the exploration area and containing, as applicable, information in sufficient detail on:

 

(a) The
exploration work carried out during the calendar year, including maps, charts and graphs illustrating the work that has been done and
the results obtained;

 

(b) The
equipment used to carry out the exploration work, including the results of tests conducted of proposed mining technologies, but not equipment
design data; and

 

(c) The
implementation of training programmes, including any proposed revisions to or developments of such programmes.

 

10.2 Such
reports shall also contain:

 

(a) The
results obtained from environmental monitoring programmes, including observations, measurements, evaluations and analyses of environmental
parameters;

 

(b) A
statement of the quantity of polymetallic nodules recovered as samples or for the purpose of testing;

 

(c) A
statement, in conformity with internationally accepted accounting principles and certified by a duly qualified firm of public accountants,
or, where the Contractor is a State or a state enterprise, by the sponsoring State, of the actual and direct exploration expenditures
of the Contractor in carrying out the programme of activities during the Contractor’s accounting year. Such expenditures may be
claimed by the contractor as part of the contractor’s development costs incurred prior to the commencement of commercial production;
and

 

    18/28

    

    

 

(d) Details
of any proposed adjustments to the programme of activities and the reasons for such adjustments.

 

10.3 The
Contractor shall also submit such additional information to supplement the reports referred to in sections 10.1 and 10.2 hereof as the
Secretary-General may from time to time reasonably require in order to carry out the Authority’s functions under the Convention,
the Regulations and this contract.

 

10.4 The
Contractor shall keep, in good condition, a representative portion of samples of the polymetallic nodules obtained in the course of exploration
until the expiration of this contract. The Authority may request the Contractor in writing to deliver to it for analysis a portion of
any such sample obtained during the course of exploration.

 

SECTION
11

DATA AND INFORMATION TO BE SUBMITTED

ON EXPIRATION OF THE CONTRACT

 

11.1 The
Contractor shall transfer to the Authority all data and information that are both necessary for and relevant to the effective exercise
of the powers and functions of the Authority in respect of the exploration area in accordance with the provisions of this section.

 

11.2 Upon
expiration or termination of this contract the Contractor, if it has not already done so, shall submit the following data and information
to the Secretary-General:

 

(a) Copies
of geological, environmental, geochemical and geophysical data acquired by the Contractor in the course of carrying out the programme
of activities that are necessary for and relevant to the effective exercise of the powers and functions of the Authority in respect of
the exploration area;

 

(b) The
estimation of mineable areas, when such areas have been identified, which shall include details of the grade and quantity of the proven,
probable and possible polymetallic nodule reserves and the anticipated mining conditions;

 

(c) Copies
of geological, technical, financial and economic reports made by or for the Contractor that are necessary for and relevant to the effective
exercise of the powers and functions of the Authority in respect of the exploration area;

 

(d) Information
in sufficient detail on the equipment used to carry out the exploration work, including the results of tests conducted of proposed mining
technologies, but not equipment design data; and

 

(e) A
statement of the quantity of polymetallic nodules recovered as samples or for the purpose of testing.

 

    19/28

    

    

 

11.3 The
data and information referred to in section 11.2 hereof shall also be submitted to the Secretary-General if, prior to the expiration of
this contract, the Contractor applies for approval of a plan of work for exploitation or if the Contractor renounces its rights in the
exploration area to the extent that such data and information relates to the renounced area.

 

SECTION
12

CONFIDENTIALITY

 

Data and information transferred
to the Authority in accordance with this contract shall be treated as confidential in accordance with the provisions of the Regulations.

 

SECTION
13

UNDERTAKINGS

 

13.1 The
Contractor shall carry out exploration in accordance with the terms and conditions of this contract, the Regulations, Part XI of the Convention,
the Agreement and other rules of international law not incompatible with the Convention.

 

13.2 The
Contractor undertakes:

 

(a) To
accept as enforceable and comply with the terms of this contract;

 

(b) To
comply with the applicable obligations created by the provisions of the Convention, the rules, regulations and procedures of the Authority
and the decisions of the relevant organs of the Authority;

 

(c) To
accept control by the Authority of activities in the Area as authorized by the Convention;

 

(d) To
fulfil its obligations under this contract in good faith; and

 

(e) To
observe, as far as reasonably practicable, any recommendations which may be issued

 

from time to time by the Legal and Technical Commission.

 

13.3 The
Contractor shall actively carry out the programme of activities:

 

(a) With
due diligence, efficiency and economy;

 

(b) With
due regard to the impact of its activities on the marine environment; and

 

(c) With
reasonable regard for other activities in the marine environment.

 

    20/28

    

    

 

13.4 The
Authority undertakes to fulfil in good faith its powers and functions under the Convention and the Agreement in accordance with article
157 of the Convention.

 

SECTION
14

INSPECTION

 

14.1 The
Contractor shall permit the Authority to send its inspectors on board vessels and installations used by the Contractor to carry out activities
in the exploration area to:

 

(a) Monitor
the Contractor’s compliance with the terms and conditions of this contract and the Regulations; and

 

(b) Monitor
the effects of such activities on the marine environment.

 

14.2 The
Secretary-General shall give reasonable notice to the Contractor of the projected time and duration of inspections, the name of the inspectors
and any activities the inspectors are to perform that are likely to require the availability of special equipment or special assistance
from personnel of the Contractor.

 

14.3 Such
inspectors shall have the authority to inspect any vessel or installation, including its log, equipment, records, facilities, all other
recorded data and any relevant documents which are necessary to monitor the Contractor’s compliance.

 

14.4 The
Contractor, its agents and employees shall assist the inspectors in the performance of their duties and shall:

 

(a) Accept
and facilitate prompt and safe boarding of vessels and installations by inspectors;

 

(b) Cooperate
with and assist in the inspection of any vessel or installation conducted pursuant to these procedures;

 

(c) Provide
access to all relevant equipment, facilities and personnel on vessels and installations at all reasonable times;

 

(d) Not
obstruct, intimidate or interfere with inspectors in the performance of their duties;

 

(e) Provide
reasonable facilities, including, where appropriate, food and accommodation, to inspectors; and

 

(f) Facilitate
safe disembarkation by inspectors.

 

    21/28

    

    

 

14.5 Inspectors
shall avoid interference with the safe and normal operations on board vessels and installations used by the Contractor to carry out activities
in the area visited and shall act in accordance with the Regulations and the measures adopted to protect confidentiality of data and information.

 

14.6 The
Secretary-General and any duly authorized representatives of the Secretary-General, shall have access, for purposes of audit and examination,
to any books, documents, papers and records of the Contractor which are necessary and directly pertinent to verify the expenditures referred
to in section 10.2 (c).

 

14.7 The
Secretary-General shall provide relevant information contained in the reports of inspectors to the Contractor and its sponsoring State
or States where action is necessary.

 

14.8 If
for any reason the contractor does not pursue exploration and does not request a contract for exploitation, it shall, before withdrawing
from the exploration area, notify the Secretary-General in writing in order to permit the Authority, if it so decides, to carry out an
inspection pursuant to this section.

 

SECTION
15

SAFETY, LABOUR AND HEALTH STANDARDS

 

15.1 The
Contractor shall comply with the generally accepted international rules and standards established by competent international organizations
or general diplomatic conferences concerning the safety of life at sea, and the prevention of collisions and such rules, regulations and
procedures as may be adopted by the Authority relating to safety at sea. Each vessel used for carrying out activities in the Area shall
possess current valid certificates required by and issued pursuant to such international rules and standards.

 

15.2 The
Contractor shall, in carrying out exploration under this contract, observe and comply with such rules, regulations and procedures as may
be adopted by the Authority relating to protection against discrimination in employment, occupational safety and health, labour relations,
social security, employment security and living conditions at the work site. Such rules, regulations and procedures shall take into account
conventions and recommendations of the International Labour Organization and other competent international organizations.

 

SECTION
16

RESPONSIBILITY AND LIABILITY

 

16.1 The
Contractor shall be liable for the actual amount of any damage, including damage to the marine environment, arising out of its wrongful
acts or omissions, and those of its employees, subcontractors, agents and all persons engaged in working or acting for them in the conduct
of its operations under this contract, including the costs of reasonable measures to prevent or limit damage to the marine environment,
account being taken of any contributory acts or omissions by the Authority.

 

    22/28

    

    

 

16.2 The
Contractor shall indemnify the Authority, its employees, subcontractors and agents against all claims and liabilities of any third party
arising out of any wrongful acts or omissions of the Contractor and its employees, agents and subcontractors, and all persons engaged
in working or acting for them in the conduct of its operations under this contract.

 

16.3 The
Authority shall be liable for the actual amount of any damage to the Contractor arising out of its wrongful acts in the exercise of its
powers and functions, including violations under article 168, paragraph 2, of the Convention, account being taken of contributory acts
or omissions by the Contractor, its employees, agents and subcontractors, and all persons engaged in working or acting for them in the
conduct of its operations under this contract.

 

16.4 The
Authority shall indemnify the Contractor, its employees, subcontractors, agents and all persons engaged in working or acting for them
in the conduct of its operations under this contract, against all claims and liabilities of any third party arising out of any wrongful
acts or omissions in the exercise of its powers and functions hereunder, including violations under article 168, paragraph 2, of the Convention.

 

16.5 The
Contractor shall maintain appropriate insurance policies with internationally recognized carriers, in accordance with generally accepted
international maritime practice.

 

SECTION
17

FORCE MAJEURE

 

17.1 The
Contractor shall not be liable for an unavoidable delay or failure to perform any of its obligations under this contract due to force
majeure. For the purposes of this contract, force majeure shall mean an event or condition that the Contractor could not reasonably be
expected to prevent or control; provided that the event or condition was not caused by negligence or by a failure to observe good mining
industry practice.

 

17.2 The
Contractor shall, upon request, be granted a time extension equal to the period by which performance was delayed hereunder by force majeure
and the term of this contract shall be extended accordingly.

 

17.3 In
the event of force majeure, the Contractor shall take all reasonable measures to remove its inability to perform and comply with the terms
and conditions of this contract with a minimum of delay; provided that the Contractor shall not be obligated to resolve or terminate any
labour dispute or any other disagreement with a third party except on terms satisfactory to it or pursuant to a final decision of any
agency having jurisdiction to resolve the dispute.

 

17.4 The
Contractor shall give notice to the Authority of the occurrence of an event of force majeure as soon as reasonably possible, and similarly
give notice to the Authority of the restoration of normal conditions.

 

    23/28

    

    

 

SECTION
18

DISCLAIMER

 

Neither the Contractor nor
any affiliated company or subcontractor shall in any manner claim or suggest, whether expressly or by implication, that the Authority
or any official thereof has, or has expressed, any opinion with respect to polymetallic nodules in the exploration area and a statement
to that effect shall not be included in or endorsed on any prospectus, notice, circular, advertisement, press release or similar document
issued by the Contractor, any affiliated company or any subcontractor that refers directly or indirectly to this contract. For the purposes
of this section, an “affiliated company” means any person, firm or company or State-owned entity controlling, controlled by,
or under common control with, the Contractor.

 

SECTION
19

RENUNCIATION OF RIGHTS

 

The Contractor, by notice
to the Authority, shall have the right to renounce its rights and terminate this contract without penalty, provided that the Contractor
shall remain liable for all obligations accrued prior to the date of such renunciation and those obligations required to be fulfilled
after termination in accordance with the Regulations.

 

29/34

 

SECTION
20

 

TERMINATION OF SPONSORSHIP

 

20.1 If
the nationality or control of the Contractor changes or the Contractor’s sponsoring State, as defined in the Regulations, terminates
its sponsorship, the Contractor shall promptly notify the Authority forthwith.

 

20.2 In
either such event, if the Contractor does not obtain another sponsor meeting the requirements prescribed in the Regulations which submits
to the Authority a certificate of sponsorship for the Contractor in the prescribed form within the time specified in the Regulations,
this contract shall terminate forthwith.

 

    24/28

    

    

 

SECTION
21

 

SUSPENSION AND TERMINATION OF CONTRACT AND PENALTIES

 

21.1 The
Council may suspend or terminate this contract, without prejudice to any other rights that

 

the Authority may have, if any of the following
events should occur:

 

(a) If,
in spite of written warnings by the Authority, the Contractor has conducted its activities in such a way as to result in serious persistent
and wilful violations of the fundamental terms of this contract, Part XI of the Convention, the Agreement and the rules, regulations and
procedures of the Authority; or

 

(b) If
the Contractor has failed to comply with a final binding decision of the dispute settlement body applicable to it; or

 

(c) If
the Contractor becomes insolvent or commits an act of bankruptcy or enters into any agreement for composition with its creditors or goes
into liquidation or receivership, whether compulsory or voluntary, or petitions or applies to any tribunal for the appointment of a receiver
or a trustee or receiver for itself or commences any proceedings relating to itself under any bankruptcy, insolvency or readjustment of
debt law, whether now or hereafter in effect, other than for the purpose of reconstruction.

 

21.2 Any suspension or
termination shall be by notice, through the Secretary-General, which shall include a statement of the reasons for taking such
action. The suspension or termination shall be effective 60 days after such notice, unless the Contractor within such period
disputes the Authority’s right to suspend or terminate this contract in accordance with Part XI, section 5, of the
Convention.

 

30/34

 

21.3 If
the Contractor takes such action, this contract shall only be suspended or terminated in accordance with a final binding decision in accordance
with Part XI, section 5, of the Convention. 21.4 If the Council has suspended this contract, the Council may by notice require the Contractor
to resume its operations and comply with the terms and conditions of this contract, not later than 60 days after such notice.

 

21.4 In
the case of any violation of this contract not covered by section 21.1 (a) hereof, or in lieu of suspension or termination under section
21.1 hereof, the Council may impose upon the Contractor monetary penalties proportionate to the seriousness of the violation.

 

21.5 The
Council may not execute a decision involving monetary penalties until the Contractor has been accorded a reasonable opportunity to exhaust
the judicial remedies available to it pursuant to Part XI, section 5, of the Convention.

 

    25/28

    

    

 

21.6 In
the event of termination or expiration of this contract, the Contractor shall comply with the Regulations and shall remove all installations,
plant, equipment and materials in the exploration area and shall make the area safe so as not to constitute a danger to persons, shipping
or to the marine environment.

 

SECTION
22

 

TRANSFER OF RIGHTS AND OBLIGATIONS

 

22.1 The
rights and obligations of the Contractor under this contract may be transferred in whole or in part only with the consent of the Authority
and in accordance with the Regulations.

 

22.2 The
Authority shall not unreasonably withhold consent to the transfer if the proposed transferee is in all respects a qualified applicant
in accordance with the Regulations and assumes all of the obligations of the Contractor and if the transfer does not confer to the transferee
a plan of work, the approval of which would be forbidden by Annex 3, article 6, paragraph 3 (c), of the Convention.

 

22.3 The
terms, undertakings and conditions of this contract shall inure to the benefit of and be binding upon the parties hereto and their respective
successors and assigns.

 

SECTION
23

NO WAIVER

 

No waiver by either party of any rights pursuant
to a breach of the terms and conditions of this contract to be performed by the other party shall be construed as a waiver by the party
of any succeeding breach of the same or any other term or condition to be performed by the other party.

 

SECTION
24

REVISION

 

24.1 When
circumstances have arisen or are likely to arise which, in the opinion of the Authority or the Contractor, would render this contract
inequitable or make it impracticable or impossible to achieve the objectives set out in this contract or in Part XI of the Convention
or the Agreement, the parties shall enter into negotiations to revise it accordingly.

 

24.2 This
contract may also be revised by agreement between the Contractor and the Authority to facilitate the application of any rules, regulations
and procedures adopted by the Authority subsequent to the entry into force of this contract.

 

24.3 This
contract may be revised, amended or otherwise modified only with the consent of the Contractor and the Authority by an appropriate instrument
signed by the authorized representatives of the parties.

 

    26/28

    

    

 

SECTION
25

DISPUTES

 

25.1 Any
dispute between the parties concerning the interpretation or application of this contract shall be settled in accordance with Part XI,
section 5, of the Convention.

 

25.2 Any
final decision rendered by a court or tribunal having jurisdiction under the Convention

 

relating to the rights and obligations of the
Authority and of the Contractor shall be enforceable in the territory of each State Party to the Convention.

 

SECTION
26

NOTICE

 

26.1 Any
application, request, notice, report, consent, approval, waiver, direction or instruction hereunder shall be made by the Secretary-General
or by the designated representative of the Contractor, as the case may be, in writing. Service shall be by hand, or by telex, facsimile
or registered airmail to the Secretary-General at the headquarters of the Authority or to the designated representative.

 

26.2 Either
party shall be entitled to change any such address to any other address by not less than ten days’ notice to the other party.

 

26.3 Delivery
by hand shall be effective when made. Delivery by telex shall be deemed to be effective on the business day following the day when the
“answer back” appears on the sender's telex machine. Delivery by facsimile shall be effective when the “transmit confirmation
report” confirming the transmission to the recipient’s published facsimile number is received by the transmitter. Delivery
by registered airmail shall be deemed to be effective 21 days after posting. 26.4 Notice to the designated representative of the Contractor
shall constitute effective notice to the Contractor for all purposes under this contract, and the designated representative shall be the
Contractor’s agent for the service of process or notification in any proceeding of any court or tribunal having jurisdiction.

 

26.4 Notice
to the Secretary-General shall constitute effective notice to the Authority for all purposes under this contract, and the Secretary-General
shall be the Authority’s agent for the service of process or notification in any proceeding of any court or tribunal having jurisdiction.

 

    27/28

    

    

 

SECTION
27

APPLICABLE LAW

 

27.1 This
contract shall be governed by the terms of this contract, the rules, regulations and procedures of the Authority, Part XI of the Convention,
the Agreement and other rules of international law not incompatible with the Convention.

 

27.2 The
Contractor, its employees, subcontractors, agents and all persons engaged in working or acting for them in the conduct of its operations
under this contract shall observe the applicable law referred to in section 27.1 hereof and shall not engage in any transaction, directly
or indirectly, prohibited by the applicable law.

 

27.3 Nothing
contained in this contract shall be deemed an exemption from the necessity of applying for and obtaining any permit or authority that
may be required for any activities under this contract.

 

SECTION
28

INTERPRETATION

 

The division of this contract
into sections and subsections and the insertion of headings are for convenience of reference only and shall not affect the construction
or interpretation hereof.

 

SECTION
29

ADDITIONAL DOCUMENTS

 

Each party hereto agrees to
execute and deliver all such further instruments, and to do and perform all such further acts and things as may be necessary or expedient
to give effect to the provisions of this contract.

 

 

28/28Exhibit 10.16

 

ACM/2019/03

 

I. ANNEX

 

 

 

 

 

 

 

 

 

ISA Contract for Exploration

Public Information Template

 

		Type of resource: Polymetallic Nodule
	Name of Contractor: Tonga Offshore Mining Limited
	Contract Start: 11 January 2012
	Sponsoring State: Kingdom of Tonga	Contract End: 11 January 2027
	Location: 6 Areas in the Clarion Clipper Zone

 

 

     

    
ACM/2019/03

    

 

Contents

 

	Introduction	1
	1.   Contract Information	1
	2.   Coordinates and Illustrative Chart of the Exploration Area	1
	3.   Plan of Work	4
	4.   Programme of Activities and Exploration Expenditure	6
	5.   Training Programme	15
	6.   Standard clauses	20

 

    i

    
ACM/2019/03

    

 

Introduction

 

The information contained in this ISA Contract for Exploration –
Public Information Template is made available to the public in response to the request by the Council of the ISA to make contracts publicly
available, subject to restrictions on confidential information, industrial secrets and proprietary data.

 

The content of the present template is in accordance with the Regulations
on Prospecting and Exploration for [Polymetallic Nodules in the Area] [ISBA/19/C/17] (the “Regulations”).

 

		1.	Contract Information

 

Annex III of the Regulations.

 

	Type of resource	Polymetallic Nodules
	Name of Contractor	Tonga Offshore Mining Limited
	Contract Start	11 January 2012
	Contract End	11 January 2027
	Location	6 Areas in the Clarion Clipperton zone, Pacific Ocean
	Contract Area (km2)	74,713

 

		2.	Coordinates and Illustrative Chart of the Exploration Area

 

Schedule 1 of Annex III of the Regulations.

 

Exploration area located between:

 

Area A (10,281 km2) 

 

All that area of seafloor within the Authority’s reserved
Block 2 in the Clarion-Clipperton Zone of the Pacific Ocean that is bounded by a line commencing at the north-west corner at:

 

	 	Latitude	Longitude
	 	8.1667 N	-152.510 W (the point of commencement)
	Then to	8.1667 N	-151.667 W
	Then to	7.1667 N	-151.667 W
	Then to	7.1667 N	-152.510 W
	Then to	8.1667 N	-152.510 W (being the point of commencement)

 

    1/34

    
ACM/2019/03

    

 

Area B (9,966 km2)

 

All that area of seafloor within the Authority’s reserved
Block 15 in the Clarion-Clipperton Zone of the Pacific Ocean that is bounded by a line commencing at the north-west corner at:

 

	 	Latitude	Longitude
	 	14.2900 N	-132.800 W (the point of commencement)
	Then to	14.6667 N	-132.000 W
	Then to	13.5801 N	-132.000 W
	Then to	13.5801 N	-133.200 W
	Then to	13.8667 N	-133.200 W
	Then to	13.8667 N	-132.800 W
	Then to	14.2900 N	-132.800 W (being the point of commencement)

 

Area C (15,763 km2)

 

All that area of seafloor within the Authority’s reserved
Block 16 in the Clarion-Clipperton Zone of the Pacific Ocean that is bounded by a line commencing at the north-west corner at:

 

	 	Latitude	Longitude
	 	15.800 N	-131.00000 W (the point of commencement)
	Then to	15.800 N	-130.00000 W
	Then to	15.333 N	-130.00000 W
	Then to	15.333 N	-129.30000 W
	Then to	15.500 N	-128.58333 W
	Then to	15.000 N	-128.58333 W
	Then to	15.000 N	-131.00000 W
	Then to	15.800 N	-131.00000 W (being the point of commencement)

 

Area D (15,881 km2)

 

All that area of seafloor within the Authority’s reserved
Block 21 in the Clarion-Clipperton Zone of the Pacific Ocean that is bounded by a line commencing at the north-west corner at:

 

	 	Latitude	Longitude
	 	14.083333 N	-123.583333 W (the point of commencement)
	Then to	13.125000 N	-123.583333 W
	Then to	13.125000 N	-124.375000 W
	Then to	13.375000 N	-124.375000 W
	Then to	13.375000 N	-125.333300 W
	Then to	13.750000 N	-125.333300 W
	Then to	13.750000 N	-125.000000 W
	Then to	14.083333 N	-125.000000 W
	Then to	14.083333 N	-123.583333 W (being the point of commencement)

 

    2/34

    
ACM/2019/03

    

 

Area E (7,002 km2)

 

All that area of seafloor within the Authority’s reserved
Block 20 in the Clarion-Clipperton Zone of the Pacific Ocean that is bounded by a line commencing at the north-west corner at:

 

	 	Latitude	Longitude
	 	13.0833 N	-125.333 W (the point of commencement)
	Then to	13.0833 N	-123.583 W
	Then to	12.7500 N	-123.583 W
	Then to	12.7500 N	-125.333 W
	Then to	13.0833 N	-125.333 W( being the point of commencement)

 

Area F (15,820 km2)

 

All that area of seafloor within the Authority’s reserved
Block 25 in the Clarion-Clipperton Zone of the Pacific Ocean that is bounded by a line commencing at the north-west corner at:

 

	 	Latitude	Longitude
	 	11.083333 N	-117.81667 W (the point of commencement)
	Then to	9.895000 N	-117.81667 W
	Then to	9.895000 N	-118.91667 W
	Then to	11.083333 N	-118.91667 W
	Then to	11.083333 N	-117.81667 W ( being the point of commencement)

 

 

    3/34

    
ACM/2019/03

    

 

		3.	Plan of Work

 

Summary of Plan of Work for Exploration including the Programme
of Activities for the first and/or the current 5-year period (Regulation 18).

 

TOML Programme of Activities for the first five-year period:

 

Year 1

 

In the first year of the programme of activities, the Contractor will
undertake a compilation and detailed review of all existing data on the exploration area, including a comprehensive literature review
of possible metallurgical flow paths. Engineering and metallurgy test work may be carried out to determine whether there are any conflicting
elements in the historical data; some field trials and exploration work may also be required as part of this clarification. These initial
studies will inform a scoping document which would be used to prepare a detailed plan aimed at placing the project on a pathway towards
production.

 

Year 2 & 3

 

In the second and third year of the programme of activities, the Contractor
will carry out cruises in the exploration area. The cruises will use surveys, sampling and environmental surveys to try to determine the
size and grade of the deep-sea mineral resources in the exploration area; obtain sufficient quantities of samples to evaluate the principal
metallurgical characteristics of the resources; and report the results to modern commercial resource reporting standards (e.g. NI 43-101).
On completion of the field work, the Contractor will undertake a prefeasibility study which will incorporate the following elements:

 

		■	Base line environmental studies;

		■	Resource estimations;

		■	Preliminary engineering and metallurgical studies and design work for both the onshore and offshore components; and

		■	Preliminary economic and commercial studies to provide scoping estimates for CAPEX and OPEX for mining, transportation, and processing
options.

 

The objective of the prefeasibility study will be to update the Contractor’s
knowledge of the characteristics of the deposit, and to narrow down the various development and related alternatives in order to enable
a well-managed, appropriately funded and focused feasibility study to be undertaken

 

Year 4 & 5

 

Beginning in Year 4, the Contractor will launch a full-scale feasibility
study to define to a high order of accuracy the engineering and design parameters required for the mining and processing of the nodule
resource, as well as to complete detailed resource estimation work. The study will be carried out to provide sufficient resource and confidence
in the resource parameters to allow project financing. As well as identifying first-generation mine sites, the Contractor will develop
mining solutions to recover the nodules and transfer them to transport vessels, as well as completing a detailed environmental impact
assessment of the project. Depending on results the Contractor will start to look at mining methods in Year 6 and may commence trial mining.

 

    4/34

    
ACM/2019/03

    

 

TOML Proposed Programme of Activities for the second five-year period:

 

TOML’s proposed programme of activities for its second five-year
work programme is:

 

		■	dependent on success at each stage;

		■	subject to change based on findings at hand at any particular time; and

		■	reliant on funding which is in turn in dependent to some extent on macro-economic conditions and developments with regards to the
Authority and its stakeholders.

 

Proposed activities and expenditure for the second five-year period

 

	Year	Description of Activities	Expenditure Plan (USD)
	6-10	
    Continued development and collection of environmental baseline data

     

    Complete pilot testing

     

    Complete geotechnical studies

     

    Complete feasibility studies

     

    First draft EIA/EMP

     

    Continue to provide training opportunities.

     
	The work program for the second five years is expected total some US$30M.  Based on an expectation that the forthcoming environmental regulations pertaining to obtaining an exploitation contract are completed.  This program includes a substantive program of environmental baseline survey and pilot mining monitoring.  It also includes fabrication and trials of pilot scale mining equipment, metallurgical test work, and other engineering and marketing studies as well as report drafting for environmental permitting and feasibility study purposes.

 

    5/34

    
ACM/2019/03

    

 

		4.	Programme of Activities and Exploration Expenditure

 

Section 4.1 of Annex IV of the Regulations and Schedule 2
of Annex III of the Regulations.

 

		I.	Agreed 5-year Programme of Activities

 

	5-year Programme of Activities	First 5-year period
	General Objectives	Objective	Description
	
    ●     Gaining
a much better understanding of the resource through literature review and exploration

     

    ●     Developing
a viable technical and economic case for production through the commencement of geotechnical studies

     

    ●     Developing
a platform to conduct baseline environmental studies through the commencement of environmental baseline and start feasibility studies
	
    In the first year of the programme of activities, the Contractor will
    undertake a compilation and detailed review of all existing data on the exploration area, including a comprehensive literature review
    of possible metallurgical flow paths. Engineering and metallurgy test work may be carried out to determine whether there are any conflicting
    elements in the historical data; some field trials and exploration work may also be required as part of this clarification. These initial
    studies will inform a scoping document which would be used to prepare a detailed plan aimed at placing the project on a pathway towards
    production. In the second and third year of the programme of activities, the Contractor will carry out cruises in the exploration area.
    The cruises will use surveys, sampling and environmental surveys to try to determine the size and grade of the deep-sea mineral resources
    in the exploration area; obtain sufficient quantities of samples to evaluate the principal metallurgical characteristics of the resources;
    and report the results to modern In the first year of the programme of activities, the Contractor will undertake a compilation and detailed
    review of all existing data on the exploration area, including a comprehensive literature review of possible metallurgical flow paths.
    Engineering and metallurgy test work may be carried out to determine whether there are any conflicting elements in the historical data;
    some field trials and exploration work may also be required as part of this clarification. These initial studies will inform a scoping
    document which would be used to prepare a detailed plan aimed at placing the project on a pathway towards production. In the second and
    third year of the programme of activities, the Contractor will carry out cruises in the exploration area. The cruises will use surveys,
    sampling and environmental surveys to try to determine the size and grade of the deep-sea mineral resources in the exploration area; obtain
    sufficient quantities of samples to evaluate the principal metallurgical characteristics of the resources; and report the results to modern
    commercial resource reporting standards (e.g. NI 43-101). On completion of the field work, the Contractor will undertake a prefeasibility
    study which will incorporate the following elements:

     

    ■      Base
line environmental studies;

    

    ■      Resource
estimations;

    

    ■      Preliminary
engineering and metallurgical studies and design work for both the onshore and offshore components; and

    

    ■      Preliminary
economic and commercial studies to provide scoping estimates for CAPEX and OPEX for mining, transportation and processing options.

     

    The objective of the prefeasibility study will be to update the Contractor’s
    knowledge of the characteristics of the deposit, and to narrow down the various development and related alternatives in order to enable
    a well-managed, appropriately funded and focused feasibility study to be undertaken.

     

    Beginning in Year 4, the Contractor will launch a full-scale feasibility
    study to define to a high order of accuracy the engineering and design parameters required for the mining and processing of the nodule
    resource, as well as to complete detailed resource estimation work. The study will be carried out to provide sufficient resource and confidence
    in the resource parameters to allow project financing

     

    As well as identifying first-generation mine sites, the Contractor
    will develop mining solutions to recover the nodules and transfer them to transport vessels, as well as completing a detailed environmental
    impact assessment of the project.

     

    Depending on results the Contractor will start to look at mining
methods in Year 6 and may commence trial mining.

 

    6/34

    
ACM/2019/03

    

 

	5-year Programme of Activities	Second 5-Year Period
	General Objectives	Objective	Description
	
    ●      Continue
environmental baseline

     

    ●      Complete
pilot testing

     

    ●      Complete
geotechnical studies

     

    ●      Complete
feasibility studies

     

    ●      First
draft EIA/EMP

     

    ●      Delivery
training programs
	Based on an expectation that the forthcoming environmental regulations pertaining to obtaining an exploitation contract are completed.  This program includes a substantive program of environmental baseline survey and pilot mining monitoring.  It also includes fabrication and trials of pilot scale mining equipment, metallurgical test work, and other engineering and marketing studies as well as report drafting for environmental permitting and feasibility study purposes.  Given the slow progress on the exploitation regulations and continually changing environmental guidelines, it is difficult to develop conforming environmental baseline studies.  TOML continues to adapt its program to accommodate these changes, deferring some work programs until there is certainty and modifying others.

 

		II.	Results achieved during reported year [1-8]: [2012-2019]

 

	Annual objectives and activities
	Year	No.	Agreed Objectives	Objective: Completed, Modified, Postponed or Replaced
	2012	1	Compilation and detailed review of all existing data on the exploration area, including a comprehensive literature review of possible metallurgical flow paths.	
    Completed

    Golder Associates conducted a Mineral Resource estimate in 2012 (all
    to an inferred level of confidence). This required compilation of historical data and cooperation with several of the Pioneer Contractors
    and the German contract holder. At the time of publication, this was the first ever polymetallic nodule Mineral Resource to meet the requirements
    of NI 43-101 of Canada and the first ever known to publicly meet the requirements of CRIRSCO (Committee for Mineral Reserves International
    Reporting Standards).

     

    TOML provided 11 scholarship payments to students of Tonga Maritime
    Polytechnical Institute (TMPI). TOML was able to fulfil its ISA contract objectives for 2012 without going offshore, thus decided to expand
    scholarship opportunities to TMPI students in lieu of offshore work TOML provided travel and accommodation support for three Ministry
    of Land’s officers who attend Deep Sea Minerals (DSM) Regional workshop in Nadi, Fiji. Travel and accommodation support was also
    provided for a Ministry of Land’s officer to attend the International Geological Congress (IGC) in Brisbane, Australia. As mentioned
    previously, TOML’s 2012 programme objectives were met without going offshore thus, the decision was made to commence the bursaries/fellowship
    and training for the personnel of the Authority in 2013.

     

 

    7/34

    
ACM/2019/03

    

 

	2013-2014	2-3	Carry out cruises in the exploration area to determine the size and grade of the deep-sea mineral resources in the exploration area	Completed: TOML completed a 55-day mapping and sampling campaign (CCZ13 cruise) aboard the RV Mt Mitchell, between August and September 2013.  The campaign collected and processed high quality bathymetry and backscatter data.  This enabled detailed geological mapping to be completed.  Nodule samples were collected using a specially designed epibenthic sled.  Some environmental studies were undertaken but more importantly, data collected during this cruise was used to design and plan more detailed environmental baseline studies which TOML implemented in the second phase cruise. Documents such as this will be used by TOML as a template for developing baseline environmental studies and plans. TOML also participated in the ISA led workshop in Wilhelmshaven, Germany to standardise Mega-faunal Taxonomy for Exploration Contract Areas in the Clarion Clipperton Fracture Zone.
	Obtain sufficient quantities of samples to evaluate the principal metallurgical characteristics of the resources	
    Completed: Part of the 2.1 tonnes of nodules collected was used
    for mineralogical characterization and metallurgical studies.

     

    Two primary exploration studies were completed in 2014 on nodules collected
    during the 2013 RV Mt Mitchell exploration cruise. An Interlab Comparison and for QA/QC Dredge Nodule Samples December 2013, completed
    March 2014 and an Insights on the moisture content and chemistry of TOML’s CCZ nodules, completed April 2014. A processing study
    was commissioned in 2014 as well, a smelting option study, which was completed in November 2014. Samples processed in 2014 with scanning
    in February 2015 by Queensland University of Technology (QUT).

     

 

    8/34

    
ACM/2019/03

    

 

	 	 	Report the results to modern commercial resource reporting standards (eg. NI 43-101)

      	Completed: In 2012 and further refined in 2016.
	 	 	Undertake prefeasibility study	
    Partially Completed: TOML developed a viable technical and economic
    case for production with a more detailed investigation of current and historical technologies applicable to collecting, transporting,
    and processing of polymetallic nodules. In this respect, TOML commissioned three mining conceptual studies as part of its de-coupled underwater
    collection concept. The conceptual studies were in respect of a Concentrator, Reclaimer and the Mechanical hoist System. Many elements
    of this study were completed to PFS quality, but there were a few areas where the studies did not meet this standard and it was categorised
    as a Preliminary Economic Assessment.

     

    The bathymetry, side-scan sonar and sampling conducted in 2013 were
    used for preliminary environmental investigation. This work along with a more detailed baseline environmental plan and literature review
    was fed into baseline environmental studies in the second cruise to TOML’s CCZ contract area in 2015.

     

	 	 	Training	
    Completed: TOML implemented a training programme in 2013 where
    two personnel from developing nations and a Tongan observer actively participated in and contributed to the success of the RV Mitchell
    cruise. TOML’s parent Nautilus also ran a marine science course in PNG for 20 students, which included two students from Fiji and
    one from Tonga sponsored by TOML. TOML also fully funded one person of Tonga Ministry of Lands to attend the SPC-SOPAC deep-sea minerals
    workshop in Vanuatu in June. In addition, TOML funded the Tongan representative to the United Nations to attend the 19th session of the
    ISA in Jamaica.

     

    In 2014, TOML supported three persons from developing nations to participate
    in a company arranged marine science course in Papua New Guinea. Tonga also funded the Tonga representative to the United Nations to attend
    the 20th session in Jamaica.

     

 

    9/34

    
ACM/2019/03

    

 

	2015-2016	4-5	Launch a full-scale feasibility study to define to a high order of accuracy the engineering and design parameters for the mining and processing of the nodule resources	Ongoing: A gap and risk analysis was undertaken on the PEA and specific studies including lift simulations, logistical studies, material handling, metallurgical and mineralogical characterization, nodule attrition studies and revised resource assessment were undertaken to address the identified risks.  A draft PFS was prepared
	Develop mining solutions to recover the nodules and transfer them to transport vessels	Ongoing: TOML’s activities on a mining test and proposed mining technologies was largely focused on advancing a set of conceptual studies, which TOML is looking to combine into a preliminary Prefeasibility Study.
	Completing a detailed environmental impact assessment of the project	
    Ongoing: TOML completed a 96-day combined resource evaluation
    and environmental baseline survey (CCZ15) conducted aboard the RV Yuzhmorgeologiya (YMG).

     

    Environmental work was a major part of the work program. Significant
progress has been made towards an environmental baseline study (a pre-requisite for a future Environmental Impact Study) with the acquisition
preservation of a suitable biological sample library, water column data and the establishment of two long term environmental monitoring
moorings. 

 

    10/34

    
ACM/2019/03

    

 

	 	 	 	
    Apart from previous literature review (which is very useful as sediment
    characteristics are thought to change only slightly between different parts of the CCZ), work in 2015 involved:

    –     vane
shear measurements in all box-cores that returned with acceptable sediment

     

    –     over
100,000 nodule size measurements that will be useful in designing the mining system

     

    Test work in 2015 involved windrow trial on deck using intact sediment
    in the large area box-corer

     

    New data collected in 2016 includes extensive megafauna logging from
    photographs and mud and nodule densities measured in the laboratory.

     

    Given the slow progress on the exploitation regulations and continually
    changing environmental guidelines, it is difficult to develop conforming environmental baseline studies. TOML continues to adapt its program
    to accommodate these changes and risks, deferring some work programs until there is certainty and modifying others.

     

	Report the results to modern commercial resource reporting standards (eg. NI 43-101)	
    Completed: The CCZ15 Cruise collected sufficient data to allow
    definition of:

     

    –     
    An expanded Inferred Mineral Resource for the entire TOML area

     

    –     
    An Indicated Mineral Resource for the Preliminary Mining Areas candidates

     

    –     
    A Measured Mineral Resource for the B5338 field and adjacent areas

     

    –     
    New mapping interpretation on TOML contract areas B through F and from publicly available data was completed.

     

    The geological and geotechnical results from the MM13 or (CCZ13)
and CCZ15 cruises completed the updated NI 43-101, wherein a polymetallic nodule resource was defined to an Indicated and Measured level
of confidence (world first), as well as upgrading of the resource at an Inferred level of confidence. The updated NI 43-101 was completed
March 2016.

 

    11/34

    
ACM/2019/03

    

 

	 	 	Training	
    Completed: In 2015, Nautilus Minerals Tonga employed a Tongan
    National on a full-time basis, as a multidisciplinary geoscientist.

     

    TOML provided the following training in 2015; at sea training was provided
    for two students, one from Madagascar and one from Brazil, both nominated by ISA. Training opportunities were also provided to three Tongan
    nationals in addition to the Tongan Government observer.

     

    In 2016, training included training in megafauna identification for
    two Tongan staff members. A seminar was run by TOML staff at the Tongan Ministry of Lands and Natural Resources. A Tongan Government representative
    was also sponsored to attend the ISA Annual Meeting.

     

	2017-2021	6-10	Continue environmental baseline	
    Ongoing: TOML’s continues to advance its environmental
    baseline knowledge.

     

    TOML conducted a “side cruise” to CCZ in 2017.

     

    The side cruise involved Yuzhmogeologiya’s R/V Gelendzhik as
    it transited the Pacific for its own work. The program aimed to recover and redeploy/deploy long term environmental moorings and to collect
    additional bulk sample of nodules for future metallurgical test work.

     

    TOML continues its analysis and interpretation of the large volume
    of baseline environmental and related data including megafauna logging. Megafauna photo logging utilizes a hierarchical morphospecies
    classification scheme, linked with geoform and substrate classification schema. It was made available from the collaboration between TOML,
    consultants Fathom Pacific and National Oceanography Centre. TOML reached out to collaborate with InterOcean Metal (IOM) in the megafauna
    logging.

     

    The megafauna logging program proceeded well in 2018, with logging
    complete and QA/QC and independent review underway. A high degree of visual commonality is seen between the three TOML subareas surveyed.

     

    In 2019, the megafauna logging program was updated (QA/QC) then adapted
    by National Oceanographic Centre to a schema that is also being applied to other research data sets.

     

    In 2017 TOML started an eDNA Pilot Study using samples obtained
from the 2015 CCZ cruise. The eDNA pilot program was completed in 2018, with very positive progress in meeting requirements regarding
preservation and processing: including concentration and effective sequencing of micro-organisms.

 

    12/34

    
ACM/2019/03

    

 

	 	 	Complete pilot testing	In progress: The designing of TOML’s mining system called the Decoupled Underwater Collection Concept (DUCC) has progressed to prefeasibility study state.  TOML continued to advance the project design by conducting land-based tests, closing technology gaps in areas not previously piloted.  This included 1/4 scale Concentrator sled towing and steering forces and a full-scale lateral conveyor test.
	Complete geotechnical studies	Ongoing: A mine plan and mine equipment/schedule was completed for the TOML PMAs (Preliminary Mining Areas).
	Complete feasibility studies	Ongoing: TOML continues to advance their prefeasibility study including completing seafloor concentrator, vessel conversion and lift system tests. TOML also contributed to the Blue Nodules riser pump tests managed by IHC and BGR.
	First draft EIA/EMP	Postponed: Given the slow progress on the exploitation regulations and continually changing environmental guidelines, it is difficult to develop conforming environmental baseline studies.  TOML continues to adapt its program to accommodate these changes and risks, deferring some work programs until there is certainty and modifying others.
	Deliver training programme	
    Ongoing: TOML is committed to training programs and TOML assisted
    Tongans through its training and community assistance programme. In country staff continued to build capacity in Tonga, through various
    presentations and by assisting other organizations conduct deep sea- related workshops in Tonga.

     

    TOML is developing a training and employment program for megafauna
    identification and logging in collaboration with the UK National Oceanographic Centre (University of Southampton). The program is anticipated
    to provide training and employment for two Tongan nationals.

     

 

    13/34

    
ACM/2019/03

    

 

		III.	III Actual and direct exploration expenditures during reported year

 

	Year	Expenditure Plan

(in US dollars)	Actual Expenditure

(in US dollars)	Comments
	Year 1

(2012)	1.5 million	0.32 million	Objectives met
	Year2 to 3

(2013- 2014)	10 million	3.8 million	Objectives met
	Year 4 to 5

(2015-2016)	20 million	4.9 million	Objectives met
	Year 6

(2017)	
    30 million for

    year 6 to year 10

     

    (2017–2022)
	0.3 million	Progress on key collection system risk areas
	Year 7

(2018)	0.3 million	Progress on key collection system risk areas
	Year 8

(2019)	0.2 million	Progress on key collection system risk areas

 

    14/34

    
ACM/2019/03

    

 

		5.	Training Programme

 

Schedule 3 of Annex III of the Regulations.

 

		I.	Training Programme

 

	Type of

 training	Maritime

 Polytechnical

 Institute 

(MPI) Support	Ministry of

 Lands, Survey &

 Natural 

Resources 

capacity building 

& training	Student

 bursary and

 fellowship	For the

 personnel of

 the authority	For 

candidates

 from other

 developing

 nations
	Institutions	Tonga Maritime Polytechnical Support	 	 	 	 
	Duration	Varied depending on the course	Varied depending on the course / workshop or cruise	Up to 6 months	Dependent on the opportunity	Dependent on the opportunity
	Scope	
    The Contractor will expand the current Nautilus Minerals Tonga (NMT)
    support of the Tonga Maritime Polytechnical Institute as follows:

     

    (a) The Contractor will provide funding for two additional scholarships
    for Tongan nationals; and

     

    (b) The Contractor will expand the programme in order to provide “work
    experience” for polytechnical graduates on its cruises and/or appropriate Nautilus sponsored cruises within the South Pacific, after
    having identified suitable candidates.

     

    The scholarships will be provided annually and will be undertaken in
    accordance with the current NMT programme whereby, as an incentive, the Contractor will reimburse only students who pass their exams.
    The scholarship programme will be reviewed bi-annually.

     
	
    Capacity within the Ministry of Lands, Survey and Natural Resources
    will be enhanced by providing vessel time for “Ministry observers” on vessels used by the Contractor to carry out its exploration
    activities, and on the occasion of appropriate NMT cruises within Tonga.

     

    Ministry personnel will also be sponsored to observe other deep ocean
    exploration work programmes at Nautilus Minerals advanced operations in Papua New Guinea. These visits will include presentations summarizing
    technical, environmental, and legal aspects of the company’s seafloor massive sulfide operations in a workshop convened by the Contractor.
    The Contractor envisages that this capacity building will be on-going throughout the duration of the contract. The programme will be reviewed
    annually to reset objectives and goals.

     

    The Contractor will also provide travel and accommodation support for
    up to two suitable Tongan Ministry personnel to attend short courses and conferences that are relevant to the emerging deep-sea minerals
    industry. These will be provided on an annual basis. Personnel, courses, and conferences will be selected by the Contractor in consultation
    with the Tongan Government. The training needs will focus on mining, engineering, geology, legal aspects and environment. This sponsorship
    will be reviewed bi-annually.

     
	
    The Contractor will sponsor a minimum of one Tongan national and one
    national of a developing nation annually with the aim of undertaking studies on environmental aspects of the deep ocean. These studies
    will be linked into the contractor’s exploration sampling programmes, environmental baseline and monitoring studies; they will cover
    aspects of the physical sciences of geology, environment, or engineering, depending on candidate suitability. The fellowships will be
    based on similar rules and criteria to the successful “Duke University Opportunity Bursary” of NMT, whereby suitably qualified
    local candidates are provided sponsorship for up to six months of study, receive training from world renowned marine scientists and take
    courses in Marine Conservation Biology at Duke University, in the United States of America. The Contractor will seek to establish similar
    relationships with other institutes for deep-sea nodule studies.

     

    The fellowship will be advertised in the local Tongan newspapers, and
    will cover geology, engineering, or environmental disciplines.

     

    The Contractor may increase the number of sponsored students depending
on data and project availability and may expand studies during the pre-feasibility and feasibility stages of its programme of work. To
this end, the Contractor Fellowship will be reviewed in year two of the contract, with a view to possibly expanding it into multiple
disciplines and increasing the number of students.
	
    The Contractor will provide an at-sea training programme for suitably
    qualified personnel of the Authority on each sampling cruise with a minimum of one berth per leg. Although training requirements and personnel
    will be identified jointly by the Contractor and the Authority during the cruise planning stage.

     

    The personnel of the Authority will also be invited to attend at least
    one information session provided by the Contractor to the Tongan Government.

     

    Training requirements for the personnel of the Authority will be reviewed
    bi-annually, in consultation with the Secretary-General of the Authority.

     
	
    The Contractor will provide one berth for at-sea training of suitably
    qualified personnel from developing nations other than Tonga during seafloor sampling programmes.

     

    Personnel will be identified during the cruise planning stage.

     

    The Contractor will advise the Authority of the expected timing for
    any sampling cruises planned, and the Authority will notify its members of the impending dates and student selection requirements, including
    the contractors preferred areas of study.

     

 

    15/34

    
ACM/2019/03

    

 

	Fields	At sea training	Deep sea minerals industry	Environmental aspects of the deep ocean	At sea training	At sea training
	Qualification required	Must pass end of year exam	Member of Ministry	
    The selection of candidates will be based on the following criteria:

     

    (a) One Tongan national, one national from another developing nation;

     

    (b) An appropriate degree in one of the required disciplines;

     

    (c) A clear desire to contribute to the emerging deep ocean resource
    industry;

     

    (d) An ability to pass the contractors cruise personnel selection criteria,
    including but not limited to physical health;

     

    (e) A willingness to undertake extended voyages out on the deep ocean;

     

    (f) An ability to travel (candidates will need a valid passport and
    appropriate visas) and meet the selection criteria of the host institutes.

     
	
    (a) Candidate(s) will be nominated by the Authority;

     

    (b) Candidate(s) must be physically capable and available to participate
    for the duration of the required cruise legs;

     

    (c) Candidate(s) must pass the Contractor’s personnel pre- selection
    and medical check- ups;

     

    (d) The Authority and the Contractor will jointly define the training
    requirements expected from the participant during the cruise.

     
	
    (a) Candidates must be a national from a developing state, and hold
    a valid passport;

     

    (b) Candidates must hold an appropriate University degree from a recognized
    tertiary institution;

     

    (c) Candidates must be capable of passing the contractors vessel personnel
    selection criteria, including but not limited to physical health;

     

    (d) Candidates must have a clear desire to contribute to the emerging
    deep ocean resource industry; and

     

    (e) Candidates must have a willingness to undertake extended voyages
    out on the deep ocean.

     

	Financing	Contractor to reimburse student’s fees at the end of the term	Contractor to provide all travel expenses	Contractor to sponsor students	Contractor to provide all travel expenses	Contractor to provide all travel expenses

 

    16/34

    
ACM/2019/03

    

 

		II.	Trainings conducted up to reported year [1-8]: [2012-2019]

 

	Start

 year	End

 Year	Name of Trainee	Nationality	Gender	Type of

 Programme	Details	Duration
	2012	2012	Tupou Halaifonua	Tongan	Male	MPI Scholarship Programme	Rating Deck	6 months
	2012	2012	Sione M Fakapulia	Tongan	Male	MPI Scholarship Programme	Rating Deck	6 months
	2012	2012	Vaea Kaho	Tongan	Male	MPI Scholarship Programme	Rating Engineer	6 months
	2012	2012	Sione L Ala	Tongan	Male	MPI Scholarship Programme	Rating Engineer	4 months
	2012	2012	Samisoni Tokelau	Tongan	Male	MPI Scholarship Programme	Deck Watchkeeping Course	6 months
	2012	2012	Sione M Fakapulia	Tongan	Male	MPI Scholarship Programme	Deck Watchkeeping Course	6 months
	2012	2012	Paula ‘Ulu’ava	Tongan	Male	MPI Scholarship Programme	Engineer Watchkeeping	6 months
	2012	2012	Maka Tongilava	Tongan	Male	MPI Scholarship Programme	Engineer Watchkeeping	2 months
	2012	2012	Sione Pahia	Tongan	Male	MPI Scholarship Programme	Engineer Class V	4 months
	2012	2012	Tevita Havili	Tongan	Male	MPI Scholarship Programme	Engineer Class V	4 months
	2012	2012	Sione M Fakapulia	Tongan	Male	MPI Scholarship Programme	Master Class V	4 months
	2012	2012	Taaniela Kula	Tongan	Male	Ministry of Lands, Survey and Natural Resources capacity building and training	Deep Sea Minerals Regional Workshop, Fiji	1 week
	2012	2012	Rennie Vaiomouing a	Tongan	Male	Ministry of Lands, Survey and Natural Resources capacity building and training	Deep Sea Minerals Regional Workshop, Fiji	1 week
	2012	2012	Malakai Finau	Tongan	Male	Ministry of Lands, Survey and Natural Resources capacity building and training	Deep Sea Minerals Regional Workshop, Fiji	1 week
	2012	2012	Taaniela Kula	Tongan	Male	Ministry of Lands, Survey and Natural Resources capacity building and training	International Geological Congress, Brisbane	1 week

 

    17/34

    
ACM/2019/03

    

 

	2013	2013	Fine Loa	Tongan	Male	Student bursary & Fellowship	Marine Science Short Course, PNG	3 weeks
	2013	2013	Steven McLaren	Fijian	Male	Student bursary & Fellowship	Marine Science Short Course, PNG	3 weeks
	2013	2013	Albert Manuel	Fijian	Male	Student bursary & Fellowship	Marine Science Short Course, PNG	3 weeks
	2013	2013	Akapei Vailea	Tongan	Male	Ministry of Lands, Survey and Natural Resources capacity building and training	SPC-SOPAC Deep Sea Mining Workshop in Vanuatu	1 week
	2013	2013	Akapei Vailea	Tongan	Male	Ministry of Lands, Survey and Natural Resources capacity building and training	Tongan observer for TOML CCZ13 cruise	2 months
	2013	2013	Paul Poloka	Papua New Guinea	Male	At-sea training for candidates from other developing nations	Trainee at TOML CCZ13 Cruise	2 months
	2013	2013	Dody Darmawan	Indonesia	Male	At-sea training for candidates from other developing nations	Trainee at TOML CCZ13 Cruise	2 months
	2013	2013	Tevita Suka Mangisi	Tongan	Male	Ministry of Lands, Survey and Natural Resources capacity building and training	19th Session of ISA in Jamaica	1 week
	2014	2014	Cardinia Funganitao	Tongan	Female	Student bursary & Fellowship	Marine Science Short Course, PNG	3 weeks
	2014	2014	Salesi Kauvaka	Tongan	Male	Student bursary & Fellowship	Marine Science Short Course, PNG	3 weeks
	2014	2014	Asenaca Balerogo	Fijian	female	Student bursary & Fellowship	Marine Science Short Course, PNG	3 weeks

 

    18/34

    
ACM/2019/03

    

 

	2015	2015	Tuamelie Fusimalohi	Tongan	Male	Ministry of Lands, Survey and Natural Resources capacity building and training	Tongan observer for 2016 CCZ cruise	3 months
	2015	2015	Rantosoa Andriharizaf y	Madag ascar	Male	At-sea training for candidates from other developing nations	Trainee at TOML CCZ15 Cruise	3 months
	2015	2015	Victor Lopes	Brazil	Male	At-sea training for candidates from other developing nations	Trainee at TOML CCZ15 Cruise	3 months
	2016	2016	Afa Kasimili	Tongan	Male	MPI Scholarship Programme	General Purpose Rating	5 months
	2016	2016	Maxwell Tuifua	Tongan	Male	MPI Scholarship Programme	General Purpose Rating	5 months
	2016	2016	Sione Otuhouma	Tongan	Male	MPI Scholarship Programme	General Purpose Rating	5 months
	2017	2017	Mele Makaafi	Tongan	Female	TOML in-office training	Megafauna logging training	4 months
	2017	2018	Elenoa Moala	Tonga	Female	TOML in-office training	Megafauna logging training	18 months
	2018	2019	Akesa Ahokava	Tongan	Female	TOML in-office training	Megafauna logging training	8 months

 

		III.	Completed Trainings per Year

 

	 	Ministry of

 Lands, Survey

 and Natural

 Resources

 capacity

 building	Maritime

 Polytechnical

 Institute 

Support	At-sea training	Student 

bursary and

 fellowship	Megafauna

 Training
	Year 1

(2012)	4 trainees in year	11 trainees in year	 	 	 
	Year 2

(2013)	3 trainees (note one opporruntiy was at sea participating in a cruise)	 	2 trainees	3 trainees	 
	Year 3

(2014)	 	 	 	3 trainees	 
	Year 4

(2015)	1 trainee	 	2 trainees	 	 
	Year 5

(2016)	 	3 trainees	 	 	 
	Year 6

(2017)	 	 	 	 	1 trainee
	Year 7

(2018)	 	 	 	 	1 trainee
	Year 8

(2019)	 	 	 	 	1 trainee

 

    19/34

    
ACM/2019/03

    

 

		6.	Standard clauses

 

Annex IV of the Regulations.

 

SECTION 1

 

DEFINITIONS

 

1.1 In the
following clauses:

 

		a)	“Exploration area” means that part of the Area allocated to the Contractor for exploration, described in schedule 1 hereto,
as the same may be reduced from time to time in accordance with this contract and the Regulations;

 

		b)	“Programme of activities” means the programme of activities which is set out in schedule 2 hereto as the same may be adjusted
from time to time in accordance with sections 4.3 and 4.4 hereof;

 

		c)	“Regulations” means the Regulations for Prospecting and Exploration for Polymetallic Nodules in the Area, adopted by the
Authority. 1.2

 

1.2 Terms
and phrases defined in the Regulations shall have the same meaning in these standard clauses.

 

1.3 In accordance
with the Agreement relating to the Implementation of Part XI of the United Nations Convention on the Law of the Sea of 10 December 1982,
its provisions and Part XI of the Convention are to be interpreted and applied together as a single instrument; this contract and references
in this contract to the Convention are to be interpreted and applied accordingly.

 

1.4 This
contract includes the schedules to this contract, which shall be an integral part hereof.

 

SECTION 2

 

SECURITY OF TENURE

 

2.1 The
Contractor shall have security of tenure and this contract shall not be suspended, terminated or revised except in accordance with sections
20, 21 and 24 hereof.

 

2.2 The
Contractor shall have the exclusive right to explore for polymetallic nodules in the exploration area in accordance with the terms and
conditions of this contract. The Authority shall ensure that no other entity operates in the exploration area for a different category
of resources in a manner that might unreasonably interfere with the operations of the Contractor

 

2.3 The
Contractor, by notice to the Authority, shall have the right at any time to renounce without penalty the whole or part of its rights in
the exploration area, provided that the Contractor shall remain liable for all obligations accrued prior to the date of such renunciation
in respect of the area renounced.

 

2.4 Nothing
in this contract shall be deemed to confer any right on the Contractor other than those rights expressly granted herein. The Authority
reserves the right to enter into contracts with respect to resources other than polymetallic nodules with third parties in the area covered
by this contract.

 

    20/34

    
ACM/2019/03

    

 

SECTION 3

 

CONTRACT TERM

 

3.1 This
contract shall enter into force on signature by both parties and shall remain in force for a period of fifteen years thereafter unless:

 

		a)	The Contractor obtains a contract for exploitation in the exploration area which enters into force before the expiration of such period
of fifteen years; or

 

		b)	The contract is sooner terminated,

 

Provided that the term of the contract may be extended in accordance
with sections 3.2 and 17.2 hereof.

 

3.2 Upon
application by the Contractor, not later than six months before the expiration of this contract, this contract may be extended for periods
of not more than five years each on such terms and conditions as the Authority and the Contractor may then agree in accordance with the
Regulations. Such extensions shall be approved if the Contractor has made efforts in good faith to comply with the requirements of this
contract but for reasons beyond the Contractor’s control has been unable to complete the necessary preparatory work for proceeding
to the exploitation stage or if the prevailing economic circumstances do not justify proceeding to the exploitation stage.

 

3.3 Notwithstanding
the expiration of this contract in accordance with section 3.1 hereof, if the Contractor has, at least 90 days prior to the date of expiration,
applied for a contract for exploitation, the Contractor’s rights and obligations under this contract shall continue until such time
as the application has been considered and a contract for exploitation has been issued or refused.

 

SECTION 4

 

EXPLORATION

 

4.1 The
Contractor shall commence exploration in accordance with the time schedule stipulated in the programme of activities set out in schedule
2 hereto and shall adhere to such time periods or any modifications thereto as provided for by this contract.

 

4.2 The
Contractor shall carry out the programme of activities set out in schedule 2 hereto. In carrying out such activities the Contractor shall
spend in each contract year not less than the amount specified in such programme, or any agreed review thereof, in actual and direct exploration
expenditures.

 

    21/34

    
ACM/2019/03

    

 

4.3 The
Contractor, with the consent of the Authority, which consent shall not be unreasonably withheld, may from time to time make such changes
in the programme of activities and the expenditures specified therein as may be necessary and prudent in accordance with good mining industry
practice, and taking into account the market conditions for the metals contained in polymetallic nodules and other relevant global economic
conditions.

 

4.4 Not
later than 90 days prior to the expiration of each five-year period from the date on which this contract enters into force in accordance
with section 3 hereof, the Contractor and the Secretary-General shall jointly undertake a review of the implementation of the plan of
work for exploration under this contract. The Secretary-General may require the Contractor to submit such additional data and information
as may be necessary for the purposes of the review. In the light of the review, the Contractor shall indicate its programme of activities
for the following five-year period, including a revised schedule of anticipated yearly expenditures, making such adjustments to its previous
programme of activities as are necessary. Schedule 2 hereto shall be adjusted accordingly.

 

SECTION 5

 

ENVIRONMENTAL MONITORING

 

5.1 The
Contractor shall take necessary measures to prevent, reduce and control pollution and other hazards to the marine environment arising
from its activities in the Area as far as reasonably possible using the best technology available to it.

 

5.2 The
Contractor shall, in accordance with the Regulations, gather environmental baseline dta as exploration activities progress and develop
and shall establish environmental baselines against which to assess the likely effects of the Contractor’s activities on the marine
environment.

 

5.3 The
Contractor shall, in accordance with the Regulations, establish and carry out a programme to monitor and report on such effects on the
marine environment. The Contractor shall cooperate with the Authority in the implementation of such monitoring.

 

5.4 The
Contractor shall, within 90 days of the end of each calendar year, report to the Secretary-General on the implementation and results of
the monitoring programme referred to in Section 5.3 hereof and shall submit data and information in accordance with the Regulations.

 

5.5 Prior
to the commencement of testing of collecting systems and processing operations, the Contractor shall submit to the Authority:

 

		a)	A site-specific environmental impact statement based on available meteorological, oceanographic and environmental data collected during
the preceding phases of exploration and containing data that could be used to establish an environmental baseline against which to assess
the likely effect of the mining tests;

 

		b)	An assessment of the effects on the marine environment of the proposed tests of collecting systems;

 

		c)	A proposal for a monitoring programme to determine the effect on the marine environment of the equipment that will be used during
the proposed mining tests

 

    22/34

    
ACM/2019/03

    

 

SECTION 6

 

CONTINGENCY PLANS AND EMERGENCIES

 

6.1 The
Contractor shall, prior to the commencement of its programme of activities under this contract, submit to the Secretary-General a contingency
plan to respond effectively to incidents that are likely to cause serious harm to the marine environment arising from the Contractor’s
activities at sea in the exploration area. Such contingency plan shall establish special procedures and provide for adequate and appropriate
equipment to deal with such incidents and, in particular, shall include arrangements for:

 

		a)	The immediate raising of a general alarm in the area of the exploration activities;

 

		b)	Immediate notification to the Secretarty-General;

 

		c)	The warning of ships which might be about to enter the immediate vicinity;

 

		d)	A continuing flow of full information to the Secretary-General relating to particulars of the contingency measures already taken and
further actions required;

 

		e)	The removal, as appropriate, of polluting substances;

 

		f)	The reduction and, so far as reasonably possible, prevention of serious harm to the marine environment, as well as mitigation of such
effects;

 

		g)	As appropriate, cooperation with other contractors with the Authority to respond to an emergency; and

 

		h)	Periodic emergency response exercises

 

6.2 The
Contractor shall promptly report to the Secretary-General any incident arising from its activities that has caused or is likely to cause
serious harm to the marine environment. Each such report shall contain the details of such incident, including, inter alia:

 

		a)	The coordinates of the area affected or which can reasonably be anticipated to be affected;

 

		b)	The description of the action being taken by the Contractor to prevent, contain, minimize and repair the serious harm to the marine
environment;

 

		c)	A description of the action being taken by the Contractor to monitor the effects of the incident on the marine environment; and

 

		d)	Such supplementary information as may reasonably be required by the Secretary-General.

 

    23/34

    
ACM/2019/03

    

 

6.3 The
Contractor shall comply with emergency orders issued by the Council and immediate measures of a temporary nature issued by the Secretary-General
in accordance with the Regulations, to prevent, contain, minimize or repair serious harm to the marine environment, which may include
orders to the Contractor to immediately suspend or adjust any activities in the exploration area.

 

6.4 If the
Contractor does not promptly comply with such emergency orders or immediate measures of a temporary nature, the Council may take such
reasonable measures as are necessary to prevent, contain, minimize or repair any such serious harm to the marine environment at the Contractor’s
expense. The Contractor shall promptly reimburse the Authority the amount of such expenses. Such expenses shall be in addition to any
monetary penalties which may be imposed on the Contractor pursuant to the terms of this contract or the Regulations.

 

SECTION 7

 

OBJECTS OF AN ARCHAEOLOGICAL OR HISTORICAL NATURE

 

The Contractor shall immediately notify the Secretary-General in writing
of any finding in the exploration area of an object of an archaeological or historical nature and its location. Following the finding
of any such object of an archaeological or historical nature in the exploration area, the Contractor shall take all reasonable measures
to avoid disturbing such object.

 

SECTION 8

 

TRAINING

 

8.1 In accordance
with the Regulations, the Contractor shall, prior to the commencement of exploration under this contract, submit to the Authority for
approval proposed training programmes of the training of personnel of the Authority and developing States, including the participation
of such personnel in all the Contractor’s activities under this contract.

 

8.2 The
scope and financing of the training programme shall be subject to negotiation between the Contractor, the Authority and the sponsoring
State or States.

 

8.3 The
Contractor shall conduct training programmes in accordance with the specific programme for the training of personnel referred to in section
8.1 hereof approved by the Authority in accordance with the Regulations, which programme, as revised and developed from time to time,
shall become a part of this contract as scheduled 3.

 

SECTION 9

 

BOOKS AND RECORDS

 

The Contractor shall keep a complete and proper set of books, accounts
and financial records, consistent with internationally accepted accounting principles. Such books, accounts and financial records shall
include information which will fully disclose the actual and direct expenditures for exploration and such other information as will facilitate
an effective audit of such expenditures.

 

    24/34

    
ACM/2019/03

    

 

SECTION 10

 

ANNNUAL REPORTS

 

10.1 The
Contractor shall, within 90 days of the end of each calendar year, submit a report to the Secretary-General covering its programme of
activities in the exploration area and containing, as applicable, information in sufficient detail on:

 

		a)	The exploration work carried out during the calendar year, including maps, charts and graphs illustrating the work that has been done
and the results obtained;

 

		b)	The equipment used to carry out the exploration work, including the results of tests conducted of proposed mining technologies, but
not equipment design data; and

 

		c)	The implementation of training programmes, including any proposed revisions to or developments of such programmes.

 

10.2 Such
reports shall also contain:

 

		a)	The results obtained from environmental monitoring programmes, including observations, measurements, evaluations and analyses of environmental
parameters;

 

		b)	A statement of the quantity of polymetallic nodules recovered as samples or for the purpose of testing;

 

		c)	A statement, in conformity with internationally accepted accounting principles and certified by a duly qualified firm or public accountants,
or, where the Contractor is a State or a state enterprise, by the sponsoring State, of the actual and direct exploration expenditures
of the Contractor in carrying out the programme of activities during the Contractor’s accounting year. Such expenditures may be
claimed by the contractor as part of the contractor’s development costs incurred prior to the commencement of commercial production;
and

 

		d)	Details of any proposed adjustments to the programme of activities and the reasons for such adjustments.

 

10.3 The
Contractor shall also submit such additional information to supplement the reports referred to in sections 10.1 and 10.2 hereof as the
Secretary-General may from time to time reasonably require in order to carry out the Authority’s functions under the Convention,
the Regulations and this contract.

 

10.4 The
Contractor shall keep, in good conditions, a representative portion of samples of the polymetallic nodules obtained in the course of exploration
until the expiration of this contract. The Authority may request the Contractor in writing to deliver to it for analysis a portion of
any such sample obtained during the course of exploration.

 

    25/34

    
ACM/2019/03

    

 

SECTION 11

 

DATA AND INFORMATION TO BU SUBMITTED ON EXPIRATION OF THE CONTRACT

 

11.1 The
Contractor shall transfer to the Authority all data and information that are both necessary for an relevant to the effective exercise
of powers and functions of the Authority in respect of the exploration area in accordance with the provisions of this section.

 

11.2 Upon
expiration or termination of this contract the Contractor, if it has not already done so, shall submit the following data and information
to the Secretary-General:

 

		a)	Copies of geological, environmental, geochemical and geophysical data acquired by the Contractor in the course of carrying out the
programme of activities that are necessary for and relevant to the effective exercise of the powers and functions of the Authority in
respect of the exploration area;

 

		b)	The estimation of mineable areas, when such areas have been identified, which shall include details of the grade and quantity of the
proven, probable and possible polymetallic nodule reserves and the anticipated mining conditions;

 

		c)	Copies of geological, technical, financial and economic reports made by or for the Contractor that are necessary for and relevant
to the effective exercise of the powers and functions of the Authority in respect of the exploration area;

 

		d)	Information in sufficient detail on the equipment used to carry out the exploration work, including the results of tests conducted
of proposed mining technologies, but not equipment design data; and

 

		e)	A statement of the quantity of polymetallic nodules recovered as samples or for the purpose of testing.

 

11.3 The
data and information referred to in section 11.2 hereof shall also be submitted to the Secretary-General if, prior to the expiration of
this contract, the Contractor applies for approval of a plan of work for exploitation or if the Contractor renounces its rights in the
exploration area to the extent that such data and information relates to the renounced area.

 

SECTION 12

 

CONFIDENTIALITY

 

Data and information transferred to the Authority in accordance with
this contract shall be treated as confidential in accordance with the provisions of the Regulations.

 

    26/34

    
ACM/2019/03

    

 

SECTION 13

 

UNDERTAKINGS

 

13.1 The
Contractor shall carry out exploration in accordance with the terms and conditions of this contract, the Regulations, Part XI of the Convention,
the Agreement and other rules of international law not incompatible with the Convention.

 

13.2 The
Contractor undertakes:

 

		a)	To accept as enforceable and comply with the terms of this contract;

 

		b)	To comply with the applicable obligations created by the provisions of the Convention, the rules, regulations and procedures of the
Authority and the decisions of the relevant organs of the Authority;

 

		c)	To accept control by the Authority of activities in the Area as authorized by the Convention;

 

		d)	To fulfil its obligations under this contract in good faith; and

 

		e)	To observe, as far as reasonably practicable, any recommendations which may be issued from time to time by the Legal and Technical
Commission.

 

13.3 The
Contractor shall actively carry out the programme of activities:

 

		a)	With due diligence, efficiency and economy;

 

		b)	With due regard to the impact of its activities on the marine environment; and

 

		c)	With reasonable regard for other activities in the marine environment.

 

13.4 The
Authority undertakes to fulfill in good faith its powers and functions under the Convention and the Agreement in accordance with article
157 of the Convention.

 

SECTION 14

 

INSPECTION

 

14.1 The
Contractor shall permit the Authority to send its inspectors on board vessels and installations used by the Contractor to carry out activities
in the exploration area to:

 

		a)	Monitor the Contractor’s compliance with the terms and conditions of this contract and the Regulations; and

 

		b)	Monitor the effects of such activities on the marine environment.

 

    27/34

    
ACM/2019/03

    

 

14.2 The
Secretary-General shall give reasonable notice to the Contractor of the projected time and duration of inspections, the name of the inspectors
and any activities the inspectors are to perform that are likely to require the availability of special equipment or special assistance
from personnel of the Contractor.

 

14.3 Such
inspectors shall have the authority to inspect any vessel or installation, including its log equipment, records, facilities, all other
recorded data and any relevant documents which are necessary to monitor the Contractor’s compliance.

 

14.4 The
Contractor, its agents and employees shall assist the inspectors in the performance of their duties and shall:

 

		a)	Accept and facilitate prompt and safe boarding of vessels and installations by inspectors;

 

		b)	Cooperate with and assist in the inspection of any vessel or installation conducted pursuant to these procedures;

 

		c)	Provide access to all relevant equipment, facilities and personnel on vessels and installatins at all reasonable times;

 

		d)	Not obstruct, intimidate or interfere with inspectors in the performance of their duties;

 

		e)	Provide reasonable facilities, including, where appropriate, food and accommodation, to inspectors; and

 

		f)	Facilitate safe disembarkation by inspectors.

 

14.5 Inspectors
shall avoid interference with the safe and normal operations on board vessels and installations used by the Contractor to carry out activities
in the area visited and shall act in accordance with the Regulations and the measures adopted to protect confidentiality of data and information.

 

14.6 The
Secretary-General and any duly authorized representatives of the Secretary-General, shall have access, for purposes of audit and examination,
to any books, documents, papers and records of the Contractor which are necessary and directly pertinent to verify the expenditures referred
to in section 10.2 ©.

 

14.7 The
Secretary-General shall provide relevant information contained in the reports of inspectors to the Contractor and its sponsoring State
or States where action is necessary.

 

14.8 If
for any reason the Contractor does not pursue exploration and does not request a contract for exploitation, it shall, before withdrawing
from the exploration area, notify the Secretary-General in writing in order to permit the Authority, if it so decides, to carry out an
inspection pursuant to this section.

 

    28/34

    
ACM/2019/03

    

 

SECTION 15

 

SAFETY, LABOUR AND HEALTH STANDARDS

 

15.1 The
Contractor shall comply with the generally accepted international rules and standards established by competent international organizations
or general diplomatic conferences concerning the safety of life at sea, and the prevention of collisions and such rules, regulations and
procedures as may be adopted by the Authority relating to safety at sea. Each vessel used for carrying out activities in the Area shall
possess current valid certificates required by and issued pursuant to such international rules and standards.

 

15.2 The
Contractor shall, in carrying out exploration under this contract, observe and comply with such rules, regulations and procedures as may
be adopted by the Authority relating to protection against discrimination in employment, occupational safety and health, labour relations,
social security, employment security and living conditions at the work site. Such rules, regulations and procedures shall take into account
conventions and recommendations of the International Labour Organization and other competent international orgaizations.

 

SECTION 16

 

RESPONSIBILITY AND LIABILITY

 

16.1 The
Contractor shall be liable for the actual amount of damage, including damage to the marine environment, arising out of its wrongful acts
or omissions, and those of its employees, subcontractors, agents and all persons engaged in working or acting for them in the conduct
of its operations under this contract, including the costs of reasonable measures to prevent or limit damage to the marine environment,
account being taken of any contributory acts or omissions by the Authority.

 

16.2 The
Contractor shall indemnify the Authority, its employees, subcontractors and agents against all claims and liabilities of any third party
arising out of any wrongful acts or omissions of the Contractor and its employees, agents and subcontractors, and all persons engaged
in working or acting for them in the conduct of its operations under this contract.

 

16.3 The
Authority shall be liable for the actual amount of any damage to the Contractor arising out of its wrongful acts in the exercise of its
powers and functions, including violations under article 168, paragraph 2, of the Convention, account being taken of contributory acts
or omissions by the Contractor, its employees, agents and subcontractors, and all persons engaged in working or acting for them in the
conduct of its operations under this contract.

 

16.4 The
Authority shall indemnify the Contractor, its employees, subcontractors, agents and all persons engaged in working or acting for them
in the conduct of its operations under this contract, against all claims and liabilities of any third party arising out of any wrongful
acts or omissions in the exercise of its powers and functions hereunder, including violations under article 168, paragraph 2, of the Convention.

 

16.5 The
Contractor shall maintain appropriate insurance policies with internationally recognized carriers, in accordance with generally accepted
international maritime practice.

 

    29/34

    
ACM/2019/03

    

 

SECTION 17

 

FORCE MAJEURE

 

17.1 The
Contractor shall not be liable for an unavoidable delay or failure to perform any of its obligations under this contract due to force
majeure. For the purposes of this contract, force majeure shall mean an event or condition that the Contractor could not reasonably be
expected to prevent or control; provided that the event or conditions was not caused by negligence or by a failure to observe good mining
industry practice.

 

17.2 The
Contractor shall, upon request, be granted a time extension equal to the period by which performance was delayed hereunder by force majeure
and the term of this contract shall be extended accordingly.

 

17.3 In
the event of force majeure, the Contractor shall take all reasonable measures to remove its inability to perform and comply with the terms
and conditions of this contract with a minimum of delay; provided that the Contractor shall not be obligated to resolve or terminate any
labour dispute or any other disagreement with a third party except on terms satisfactory to it or pursuant to a final decision of any
agency having jurisdiction to resolve the dispute.

 

17.4 The
Contractor shall give notice to the Authority of the occurrence of an event of force majeure as soon as reasonably possible, and similarly
give notice to the Authority of the restoration of normal conditions.

 

SECTION 18

 

DISCLAIMER

 

Neither the Contractor or any affiliated company or subcontractor shall
in any manner claim or suggest, whether expressly or by implication, that the Authority or any official thereof has, or has expressed,
any opinion with respect to polymetallic nodules in the exploration area and a statement to that effect shall not be included in or endorsed
on any prospectus, notice, circular, advertisement, press release or similar document issued by the Contractor, any affiliated company
or any subcontractor that refers directly or indirectly to this contract. For the purposes of this section, an “affiliated company”
means any person, firm or company or State-owned entity controlling, controlled by, or under common control with, the Contractor.

 

SECTION 19

 

RENUNCIATION OF RIGHTS

 

The Contractor, by notice to the Authority, shall have the right to
renounce its rights and terminate this contract without penalty, provided that the Contractor shall remain liable for all obligations
accrued prior to the date of such renunciation and those obligations required to be fulfilled after termination in accordance with the
Regulations.

 

    30/34

    
ACM/2019/03

    

 

SECTION 20

 

TERMINATION OF SPONSORSHIP

 

20.1 If
the nationality or control of the Contractor changes or the Contractor’s sponsoring State, as defined in the Regulations, terminates
its sponsorship, the Contractor shall promptly notify the Authority forthwith.

 

20.2 In
either such event, if the Contractor does not obtain another sponsor meeting the requirements prescribed in the Regulations which submits
to the Authority a certificate of sponsorship for the Contractor in the prescribed form within the time specified in the Regulations,
this contract shall terminate forthwith.

 

SECTION 21

 

SUSPENSION AND TERMINATION OF CONTRACT AND PENALTIES

 

21.1 The
Council may suspend or terminate this contract, without prejudice to any other rights that the Authority may have, if any of the following
events should occur:

 

		a)	If, in spite of written warnings by the Authority, the Contractor has conducted its activities in such a way as to result in serious
persistent and wilful violations of the fundamental terms of this contract, Part XI of the Convention, the Agreement and the rules, regulations
and procedures of the Authority; or

 

		b)	If the Contractor has failed to comply with a final binding decision of the dispute settlement body applicable to it; or

 

		c)	If the Contractor becomes insolvent or commits an act of bankruptcy or enters into any agreement for composition with its creditors
or goes into liquidation or receivership, whether compulsory or voluntary, or petitions or applies to any tribunal for the appointment
of a receiver or a trustee or receiver for itself or commences any proceedings relating to itself under any bankruptcy, insolvency or
readjustment of debt law, whether now or hereafter in effect, other than for the purpose of reconstruction.

 

21.2 Any
suspension or termination shall be by notice, through the Secretary-General, which shall include a statement of the reasons for taking
such action. The suspension or termination shall be effective 60 days after such notice, unless the Contractor within such period disputes
the Authority’s right to suspend or terminate this contract in accordance with Part XI, section 5, of the Convention.

 

21.3 If
the Contractor takes such action, this contract shall only be suspended or terminated in accordance with a final binding decision in accordance
with Part XI, section 5, of the Convention.

 

    31/34

    
ACM/2019/03

    

 

21.4 If
the Council has suspended this contract, the Council may by notice require the Contractor to resume its operations and comply with the
terms and conditions of this contract, not later than 60 days after such notice.

 

21.5 In
the case of any violation of this contract not covered by section 21.1(a) hereof, or in lieu of suspension or termination under section
21.1 hereof, the Council may impose upon the Contractor monetary penalties proportionate to the seriousness of the violation.

 

21.6 The
Council may not execute a decision involving monetary penalties until the Contractor has been accorded a reasonable opportunity to exhaust
the judicial remedies available to it pursuant to Part XI, section 5, of the Convention.

 

21.7 In
the event of termination or expiration of this contract, the Contractor shall comply with the Regulations and shall remove all installations,
plant, equipment and materials in the exploration area and shall make the area safe so as not to constitute a danger to persons, shipping
or to the marine environment.

 

SECTION 22

 

TRANSFER OF RIGHTS AND OBLIGATIONS

 

22.1 The
rights and obligations of the Contractor under this contract may be transferred in whole or in part only with the consent of the Authority
and in accordance with the Regulations.

 

22.2 The
Authority shall not unreasonably withhold consent to the transfer if the proposed transferee is in all respects a qualified applicant
in accordance with the Regulations and assumes all of the obligations of the Contractor and if the transfer does not confer to the transferee
a plan of work, the approval of which would be forbidden by Annex 3, article 6, paragraph 3© of the Convention.

 

22.3 The
terms, undertakings and conditions of this contract shall inure to the benefit of and be binding upon the parties hereto and their respective
successors and assigns.

 

SECTION 23

 

NO WAIVER

 

No waiver by either party of any rights pursuant to a breach of the
terms and conditions of this contract to be performed by the other party shall be construed as a waiver by the party of any succeeding
breach of the same or any other term or condition to be performed by the other party.

 

    32/34

    
ACM/2019/03

    

 

SECTION 24

 

REVISION

 

24.1 When
circumstances have arisen or are likely to arise which, in the opinion of the Authority or the Contractor, would render this contract
inequitable or make it impracticable or impossible to achieve the objectives set out in this contract or in Part XI of the Convenient
or the Agreement, the parties shall enter into negotiations to revise it accordingly.

 

24.2 This
contract may also be revised by agreement between the Contractor and the Authority to facilitate the application of any rules, regulations
and procedures adopted by the Authority subsequent to the entry into force of this contract.

 

24.3 This
contract may be revised, amended or otherwise modified only with the consent of the Contractor and the Authority by an appropriate instrument
signed by the authorized representatives of the parties.

 

SECTION 25

 

DISPUTES

 

25.1 Any
dispute between the parties concerning the interpretation or application of this contract shall be settled in accordance with Part XI,
section 5, of the Convention.

 

25.2 Any
final decision rendered by a court or tribunal having jurisdiction under the Convention relating to the rights and obligations of the
Authority and of the Contractor shall be enforceable in the territory of each State Party to the Convention.

 

SECTION 26

 

NOTICE

 

26.1 Any
application, request, notice, report, consent approval, waiver, direction or instruction hereunder shall be made by the Secretary-General
or by the designated representative of the Contractor, as the case may be, in writing. Service shall be by hand, or by telex, facsimile
or registered airmail to the Secretary-General at the headquarters of the Authority or to the designated representative.

 

26.2 Either
party shall be entitled to change any such address to any other address by not less than ten days’ notice to the other party.

 

26.3 Delivery
by hand shall be effective when made. Delivery by telex shall be deemed to be effective on the business day following the day when the
“answer back” appears on the sender’s telex machine. Delivery by facsimile shall be effective when the “transmit
confirmation report” confirming the transmission to the recipient’s published facsimile number is received by the transmitter.
Delivery by registered airmail shall be deemed to be effective 21 days after posting.

 

26.4 Notice
to the designated representative of the Contractor shall constitute effective notice to the Contractor for all purposes under this contract,
and the designated representative shall be the Contractor’s agent for the service of process or notification in any proceeding of
any court or tribunal having jurisdiction.

 

26.5 Notice
to the Secretary-General shall constitute effective notice to the Authority for all purposes under this contract, and the Secretary-General
shall be the Authority’s agent for the service of process or notification in any proceeding of any court or tribunal having jurisdiction.

 

    33/34

    
ACM/2019/03

    

 

SECTION 27

 

APPLICABLE LAW

 

27.1 This
contract shall be governed by the terms of this contract, the rules, regulations and procedures of the Authority, Part XI of the Convention,
the Agreement and other rules of international law not incompatible with the Convention.

 

27.2 The
Contractor, its employees, subcontractors, agents and all persons engaged in working or acting for them in the conduct of its operations
under this contract shall observe the applicable law referred to in section 27.1 hereof and shall not engage in any transaction, directly
or indirectly, prohibited by the applicable law.

 

27.3 Nothing
contained in this contract shall be deemed an exemption from the necessity of applying for and obtaining any permit or authority that
may be required for any activities under this contract.

 

SECTION 28

 

INTERPRETATION

 

The division of this contract into sections and subsections and the
insertion of headings are for convenience of reference only and shall not affect the construction or interpretation hereof.

 

SECTION 29

 

ADDITIONAL DOCUMENTS

 

Each party hereto agrees to execute and deliver all such further instruments,
and to do and perform all such further acts and things as may be necessary or expedient to give effect to the provisions of this contract.

 

 

34/34

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00326-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00326-of-00352.parquet"}]]