Document:

ex1025k123109.htm

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    Exhibit
10.25

    

    

    

    

    

    

    

    CONTRACT

    

    Of
nickel-cobalt ores extraction at Novo-Shandashinsky, Vostochno-Shandashinsky,
III-
Shandashinsky, Shirpakainsky, Kara-Obinsky and Steninsky deposits in
Aktyubinsk oblast
 of the Republic of Kazakhstan

    

    

    

    Concluded
in accordance with the Licenses of the following series МГ N 414, N 415, N
420,
 N 421, N 425 and N 426 dated October 12, 1995

    

    

    between

    

    Ministry
of energy and natural resources of the Republic of Kazakhstan

    

    And

    

    Joint
Venture Kimpesaysky mine group

    

    

    (English
Translation)

    

    

    

     
 

    
 

    Almaty,
1997

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    

    CONTENT

    

    Preamble

    Article
1. Definitions

    Article
2. Contract mission

    Article
3. Terms of the Contract

    Article
4. Contract territory

    Article
5. Ownership of property and information

    Article
6.  Government’s right of natural resources acquisition and
requisition

    Article
7. General rights and obligations of the Parties

    Article
8. Work program

    Article
9. Social infrastructure development

    Article
10. Industrial training

    Article
11. Stage of production

    Article
12. Calculation and accounting

    Article
13. Nickel-cobalt ores measuring

    Article
14. Subcontracted works implementation

    Article
15. Financing

    Article
16. Taxes and payments

    Article
17. Accounting

    Article
18. Insurance

    Article
19. Liquidation and liquidation fund

    Article
20. Conservation of mineral resources and environment

    Article
21. Population and personnel security

    Article
22. Parties’ responsibility for the Contract terms violation

    Article
23. Force majeur

    Article
24. Confidentiality

    Article
25. Transfer of authority and obligations

    Article
26. Applicable law

    Article
27. Dispute resolution

    Article
28. Contract stability guarantees

    Article
29. Terms of cancellation and termination of the Contract

    Article
30. The language of the Contract

    Article
31. Other provisions

    

    

    

    

    Appendixes

    

    Appendix
1. Work program to the Contract

    Appendix
2. Licenses for the right to use subsurface mineral resources in the Republic of
Kazakhstan of the following series МГ N 414, N 415, N
420, N 421, N 425 and N 426

    Appendix
3. Expert’s report and coordination

    

    

    2

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    

    

    

    

    

    Preamble

    

          The
present Contract was concluded on 15 July, 1997 between Ministry of energy and
natural resources of the Republic of Kazakhstan (hereinafter referred to as
Competent authority)
which was entitled to hold negotiations, determine the terms and sign the given
Contract and the Joint Venture Kimpesaysky mine group (hereinafter referred to
as Contractor) which was
established in accordance with the legislation of the Republic of Kazakhstan and
granted with the Licenses of the following series МГ N 414, N 415, N
420, N 421, N 425 and N 426 dated October 12, 1995 (Appendix 2).

         Taking
into consideration the fact that the Constitution, laws and statutory acts of
the Republic of Kazakhstan state that all the bowels of earth, including natural
resources, belong exclusively to the Republic, the government of the Republic of
Kazakhstan has entitled the Competent authority to conclude the Contract in
accordance with all the regulations.

         Ministry
of energy and natural resources together with the Joint Venture Kimpesaysky mine
group have agreed that the present Contract will regulate their mutual rights
and obligations during exploitation of  Novo-Shandashinsky,
Vostochno-Shandashinsky, Shandashinsky, Shirpakainsky, Kara-Obinsky and
Steninsky deposits situated  in Aktyubinsk oblast of the Republic of
Kazakhstan.

    The Competent authority and the
Contractor have
concluded the Contract as follows:

    

    Article
1. Definitions

    

    Terms and
definitions, that were not given any explanation in the given article, bear the
meaning indicated in the Decree of the President that has the force of the law
dated January 27, 1996 “On
mineral resources and subsurface management” (hereinafter referred to as
Decree on mineral
resources), and other legislative instruments on separate types of
natural resources and on “Man-caused mineral formations”.

    
      	
              1.  

            	
              Reimbursable expenses –
      expenses that in accordance with the terms and conditions of the present
      Contract and legislation of the Republic are intended for exploration
      works and that should be reimbursed in monetary or any other natural
      form.

            

      
        	
                2.  

              	
                State (Republic)
      -  the Republic of
Kazakhstan

              

      

      
        	
                3.  

              	
                State authority –
      central executive state body authorized to implement some certain
      functions on behalf of the state.

              

      

      
        	
                4.  

              	
                Claim – the document
      applied to the License that determines the boundaries of the provided area
      of mineral resources, within the limits of which the works indicated in
      the License are permitted.

              

      

      
        	
                5.  

              	
                The year of Contract validity
      – a period equal to 12 (twelve) months of the Gregorian calendar.
      Within the context of the Contract it starts when the document comes into
      effect.

              

      

      
        	
                6.  

              	
                Effective date – the
      date stated in clause 3.1 of the present Contract when the Contract is
      registered in accordance with the existing legislation of the Republic of
      Kazakhstan in the Ministry of energy and natural
  resources.

              

      

      
        	
                7.  

              	
                 Mining – means
      operations (works) related to natural resources extraction out of the
      bowels of earth and out of man-caused mineral formations that belong to
      the state, including all the processing
  operations.

              

      

      
        	
                8.  

              	
                Law on subsurface
      management – the Decree of the President of the Republic of
      Kazakhstan that has the force of law dated January 27, 1996 “On mineral resources and
      subsurface management” and other legislative instruments on
      separate types of natural resources and on “Man-caused mineral
      formations”.

              

      

      
        	
                9.  

              	
                Commercial discovery –
      the discovery of one or more deposits on the contract territory that are
      economically profitable for the
mining.

              

      

    

     

    3

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

     

     

     

    
    

    
    

    
    

    
    

    
    

    
    

    
    

    
    

    
    

    
      	
              10.  

            	
              Competent authority –
      means Ministry of energy and natural resources of the Republic of
      Kazakhstan entitled to carry out all the operations directly connected
      with the performance and cessation of the present
  Contract.

            

    

    
      	
              11.  

            	
              Contract – present
      contract of nickel-cobalt ores extraction concluded between the Competent authority and
      the Contractor, as
      well as all the appendixes to the given
  Contract.

            

    

    
      	
              12.  

            	
              Contract territory – the
      territory determined in clause 4 of the License by
      geographic   coordinates and provided for the exploration
      works at Novo-Shandashinsky, Vostochno-Shandashinsky, Shandashinsky,
      Shirpakainsky, Kara-Obinsky and Steninsky deposits situated  in
      Aktyubinsk oblast of the Republic of
Kazakhstan.

            

    

    
      	
              13.  

            	
              License – permissions
      issued to the Contractor by the government of the Republic of Kazakhstan
      for development of nickel-cobalt ores deposits situated in Aktyubinsk
      oblast of Kazakhstan for the period of 3-5 years (see appendix
      2).

            

    

    
      	
              14.  

            	
              License department –
      executive authority, Licensor, which in accordance with the
      existing legislation is entitled to issue
  licenses.

            

    

    
      	
              15.  

            	
              Licensing activity – all
      the works specified in the License and Contract connected with the
      exploration works at Novo-Shandashinsky, Vostochno-Shandashinsky,
      Shandashinsky, Shirpakainsky, Kara-Obinsky and Steninsky deposits
      situated  in Aktyubinsk oblast of the Republic of
      Kazakhstan.

            

    

    
      	
              16.  

            	
              Deposits – deposits
      containing natural accumulations of nickel-cobalt
  ores.

            

    

    
      	
              17.  

            	
              Tax legislation - the
      Decree of the President of the Republic of Kazakhstan that has the force
      of law dated April 24, 1995 #2235 “On taxes and other obligatory
      budget payments”, all the amendments and additions to it, as well
      as other legislative and statutory acts regulating tax
      payment.

            

    

    
      	
              18.  

            	
              Bowels of earth – part
      of earth’s crust that lays below the topsoil and in the absence thereof
      below the surface and bottom of the reservoirs, that stretches to the
      depths available for subsurface operations with the consideration of
      technological progress.

            

    

    
      	
              19.  

            	
              Subsurface use operations –
      works related to the polymetallic ores extraction conducted on the
      contract territory in accordance with the issued
  licenses.

            

    

    
      	
              20.  

            	
               Contractor – subsurface
      user - Joint Venture Kimpesaysky mine group (private property), that has
      concluded a contract with the Competent
  authority.

            

    

    
      	
              21.  

            	
              Government – the
      government of the Republic.

            

    

    
      	
              22.  

            	
              Associated natural resources –
      component parts of the mineral wealth extracted together with the
      main natural resources.

            

    

    
      	
              23.  

            	
              Favorable practice of deposit
      development – practice normally applied by subsurface users in
      different countries of the world and is considered to be rational, safe,
      efficient and necessary for realization of subsurface
      operations.

            

    

    
      	
              24.  

            	
              Work program – all types
      of plans prepared for nickel-cobalt ores extraction at Novo-Shandashinsky,
      Vostochno-Shandashinsky, Shandashinsky, Shirpakainsky, Kara-Obinsky and
      Steninsky deposits situated in Aktyubinsk oblast of the Republic of
      Kazakhstan.

            

    

    
      	
              25.  

            	
              Nickel-cobalt ores –
      silicate nickel-cobalt ores containing industrial nickel
      reserves.

            

    

    
      	
              26.  

            	
              Parties –Competent
      authority and Contractor

            

    

    
      	
              27.  

            	
              Subcontractor – legal
      entity or natural person that concluded a contract with the Contractor on
      implementation of any part of Contractor’s obligations stipulated by the
      Contract.

            

    

    
      	
              28.  

            	
              Third party – legal
      entity or natural person excluding Parties of the
  Contract.

            

    

    
      	
              29.  

            	
              Approved reserves –
      geological and mineable reserves of mineral wealth approved by the
      state commission of experts.

            

    

    

    4

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    

    Article
2. Contract Mission

    

    The
Contract mission consists in determination and legal implementation of
contractual relationships between Competent authority and Contractor under the
existing legislation of the Republic.

    

    Article
3. Terms of the Contract

    

    3.1 The
present Contract comes into force since the date of its state registration in
Ministry of energy and natural resources of the Republic of Kazakhstan basing on
Licenses issued on 12 October, 1995: for III-Shandashinsky deposit series МГ #
414,  Shirpakainsky deposit series #415,  Kara-Obinsky
deposit series  МГ
#420,  Vostochno-Shandashinsky deposit series МГ#421,  Steninsky
deposit series МГ #425,
Novo-Shandashinsky deposit series МГ#425.

    3.2 The
term of the Contract is due on 12 October, 2000 (the last day of License МГ #426 expiration
date).

    3.3 The
Contract prolongation is possible only after the License
prolongation.

    3.4 With
the Contract prolongation the terms and conditions of the Contract can be
changed with the written consent of the Parties, provided such amendments are
not at variance with the license terms.

     

    Article
4. Contract Territory

    

    4.1
Contractor shall realize the nickel-cobalt ores extraction at
Novo-Shandashinsky, Vostochno-Shandashinsky, Shandashinsky, Shirpakainsky,
Kara-Obinsky and Steninsky deposits  within the limit of the contract
territory in accordance with the Licenses series МГ ## 414, 426,
415, 421, 420, 425 dated October 12, 1995 as well as with the terms of the
Contract.

    4.2 If
during nickel-cobalt ores extraction at the above stated deposits it is found
out that geographic limits of the beds go beyond the contract territory then
this problem is settled either with the help of license terms changing or with
additional license issuing.

    

    Article
5. Ownership of Property and Information

    

    5.1 All
the tangible and fictitious assets gained by the Contractor for the
nickel-cobalt ores extraction at Novo-Shandashinsky, Vostochno-Shandashinsky,
Shandashinsky, Shirpakainsky, Kara-Obinsky and Steninsky deposits  are
the property of the Contractor.

    5.2 Right
for property stated in the clause 5.1 of the Contract may be pledged or used
otherwise on favor of the Third party in order to provide financing of
nickel-cobalt ores extraction in accordance with the existing legislation of the
Republic.

    5.3
Information on subsurface geology of mineral resources contained in bowels of
earth, geological information of the deposits, reserves volume, development
conditions, as well as other specific features of the earth’s bowels, expressed
in geological reports, maps and other materials belongs to the State if it was
financed by the government or to the Contractor if it was financed at the
expense of the Contractor.

    5.4
Information of mineral resources contained on the contract territory being in
the ownership of the state is provided to the Contractor by the territorial
administration Zapkaznedra of the main mineral resources administration
KAZGOSNEDRA in an order stipulated by the legislation of the
Republic.

    5.5
Geological or any other information concerning mineral resources gained by the
Contractor while extracting nickel-cobalt ores shall be handed over for storage,
systematization and generalization to the Main administration of mineral
resources KAZGOSNEDRA and its authorities.

     

    5

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    5.6 Usage
of geological information on mineral resources gained by the Contractor and
handed over by him in accordance with the clause 5.5 of the present Contract, in
educational, scientific or any other purposes is determined with the help of
special agreement concluded between the Contractor and the Main administration
of mineral resources KAZGOSNEDRA.

    5.7 With
the Contract termination the whole geological information passes into ownership
of the state. Contractor shall hand over all the data and other mediums,
including sources of information, to the Main administration of mineral
resources KAZGOSNEDRA without any compensation.

    5.8
Contractor shall on a grant basis provide statistical reporting to the competent
authority in amounts and terms stipulated by the program of statistical works in
accordance with the legislation of the Republic of Kazakhstan “On government
statistics”  #98-1 3 PK dated 07.05.97.

    5.9
Statutory acts of the authorized agency concerning organization and
implementation of primary accounting and statistics shall be obligatory for the
Contractor.

    5.10
Authorized agency shall provide the Contractor with the statistical reporting
blanks as well as with the instructions on completion of such
forms.

    5.11
Contractor is guaranteed with the confidentiality of all the information
provided by him to the agencies of government statistics. Statistical
information dissemination is allowed only by approbation of the Joint Venture
Kimpersaysky mine group.

    5.12
Violation of the law “On government statistics” entails responsibility envisaged
by the existing legislation.

    

    

    Article
6.  Government’s Right of Natural Resources Acquisition and
Requisition

    

    6.1 In
case of war, natural disaster or any other cases stipulated by legislation as
emergency situations, the government has the right of requisition of some part
of or all the natural resources that are in the ownership of the Contractor.
Requisition may be realized at the rate necessary for the government for the
whole period of emergency.

    6.2
Government guarantees compensation for the requisitioned resources either by
natural payment or by paying off the cost according to the world market prices,
valid for the requisition day (the foreign Contractor shall get compensation in
freely convertible currency while the national Contractor in national currency
of the Republic).

    6.3 The
government has the priority right for acquisition of nickel-cobalt ores at the
prices not exceeding the world market price.

    

    Article
7. General Rights and Obligations of the Parties

    

    7.1
Contractor has the right to:

    7.1.1
Carry out the nickel-cobalt ores extraction at the contract territory on the
exceptional basis.

    7.1.2
Independently realize any legal actions concerning subsurface use within the
limits of the contract territory vested to the Contractor in accordance with the
terms envisaged by Licenses and the Contract.

    7.1.3 Use
the results of its activity, including gold, copper, zinc, silver and sulfur, at
its own convenience.

    7.1.4
Construct objects of productive and social sphere needed for nickel-cobalt ores
extraction on the contract territory and if necessary on other ground
areas.

    7.1.5 On
the nod with the owners use the objects and services of general usage both on
the contract territory and beyond it.

    7.1.6 As
a matter of priority negotiate on prolongation of Contract terms in conformity
with the order stipulated by the clause 3.3 of the present
Contract.

     

    6

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    7.1.7
Attract subcontractors for implementation of separate works connected with the
nickel-cobalt ores extraction.

    7.1.8
Transfer all or part of its rights to other parties observing the terms
stipulated by the Contract and legislation of the Republic.

    7.1.9
Cease its activity on terms envisaged by the Contract and legislation of the
State.

    7.1.10 In
case of Contract cancellation the Contractor has the right to independently
dispose of its properties.

    7.1.11
This list may be expanded on consent of the Parties provided it does not
contrary to the state legislation.

    7.2 Contractor is obliged
to:

    7.2.1
Start commercial extraction of nickel-cobalt ores in accordance with the working
(technical) draft and work program (appendix 1), coordinated by the
Parties.

    7.2.2   Select
most effective methods and technologies for ores extraction based on the
standards of the world practice.

    7.2.3 Use
the contract territory only for the purposes stipulated by the License and the
Contract.

    7.2.4
Realize nickel-cobalt ores extraction at Novo-Shandashinsky,
Vostochno-Shandashinsky, Shandashinsky, Shirpakainsky, Kara-Obinsky and
Steninsky deposits in strict correspondence with the legislation of the state
and the work program.

    7.2.5 Not
prevent other people from free moving within the contract territory, from usage
of objects and services of general usage or conduct other types of works
including prospecting and extraction of other mineral resources unless it refers
to special security terms and if such activity doesn’t hamper the ore
extraction.

    7.2.6
Observe the process flow sheets and projects of nickel-cobalt ores extraction
including population and personnel security.

    7.2.7
Give preference to the equipment, materials and finished commodity produced in
the State provided they are quite competitive by ecological and technical
qualities, prices, operational characteristics and terms of
delivery.

    7.2.8
Give priority to the state organization in services at the extraction of ore,
including the usage of air, water, railway and other types of transport provided
the services are competitive by price, efficiency and quality.

    7.2.9
Give the preference to the Kazakhstan specialists for the extraction
works.

    7.2.10
Provide the Competent authority with the work program and information on the
process of its realization.

    7.2.11
Finance not less than 2 (one)% of the total amount of investments for the
professional training of Kazakhstan personnel attracted for the Contract
works.

    7.2.12
Freely provide the control agencies of the state with all the necessary
documents while implementing its official functions and eliminating detected
violations in proper time.

     7.2.13
Transfer information on nickel-cobalt ores extraction to the third parties and
if necessary, with the written consent of other Parties.

    7.2.14
Pay taxes and carry out other compulsory payments in proper time.

    7.2.15 In
the course of its activity preserve objects of cultural and historical
importance situated on the contract territory.

    7.2.16
Forecast long-term ecological consequences of its activity and provide these
forecasts to the authorized agency and public authorities of environmental
protection not later than 1 year before the Contract cessation.

    7.2.17
Leave the contract territory in condition correspondent to the requirements of
mining and sanitary inspection, conservation of mineral wealth and
surroundings.

    7.2.18
Restore the land areas and other natural objects whose condition had been
disturbed by the Contractor’s activity to the condition suitable for further
usage in accordance with the requirements of acting legislation of the
Republic.

     

    7

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    7.3 Obligations of the Competent
authority:

    7.3.1
Provide performance and cessation of the contract in order and on the grounds
stipulated by the legislation of the Republic.

    7.3.2
Provide the License committee with the proposals concerning License withdrawal
or alteration of its terms.

    7.3.3
Secure the land area to the Contractor with the right of land tenure in
correspondence with the issued license.

    7.4 Rights of the competent
authority:

    7.4.1
Represent the government at negotiations with the Contractor according to the
terms of the Contract.

    7.4.2
Send in proposals to the License committee concerning the License terms
alteration in the process of Contract performance.

    7.4.3
Require regular and selective accounting of the Contractor on performance of the
Contract.

    7.4.4
Inspect the nickel-cobalt ore extraction carried out by the Contractor including
the Contractor’s documentation related to the activity on performance of the
Contract.

    7.4.5
Have access to any kind of works on the contract territory connected with the
nickel-cobalt ores extraction.

    

    Article
8. Work Program

    

    8.1
Contractor performs extraction of nickel-cobalt ores at Novo-Shandashinsky,
Vostochno-Shandashinsky, Shandashinsky, Shirpakainsky, Kara-Obinsky and
Steninsky deposits in accordance with the work program approve by the Competent
authority.

    8.2 The
work program is elaborated on the basis of technical and economic calculations
and substantiations, expert evaluation of nickel-cobalt ores reserves of each
above-mentioned deposits as well as other materials with due regard for good
utility practices of deposit development.

    8.3
Contractor may make suggestions concerning changing or expanding of the agreed
work program. All the amendments to the work program shall be introduced in a
written form with the mutual consent of the Parties.

    

    Article
9. Social Infrastructure Development

    

    9.1
Contractor shall provide a certain number of workplaces for the local population
as well as accommodation for the workers and shall solve various social
problems. The financial means in amount of 15 Mio. tenge shall be assigned for
these purposes for the whole period of currency of the Contract.

    

    

    Article
10. Industrial Training

     

    10.1 It is stipulated that the
Contractor shall provide financing of compulsory industrial training in amount
of not less than 1 % of the total expenses assigned for the minimum work program
implementation.

     

    Article
11. Stage of Production

    

    11.1
Contractor is empowered to carry out extraction on the contract territory during
4 (four) successive years.

    11.2
Contractor shall start extraction works not later than 30 days after signing the
Contract.

     

    8

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    

    Article
12. Calculation and Accounting

    

    12.1
Contractor shall keep books and within a given period save all the accounting
records connected with the extraction of nickel-cobalt ores at
Novo-Shandashinsky, Vostochno-Shandashinsky, Shandashinsky, Shirpakainsky,
Kara-Obinsky and Steninsky deposits in correspondence with the existing
legislation of the Republic.

    12.2
Contractor shall provide the competent authority with the detailed reporting of
his activity for the previous year not later than January 15 of the current
year.

    12.3
Contactor shall submit activity report to the state bodies in terms and order
stipulated by the legislation.

    12.4
Competent authority is entitled to revise the Contractor’s performance of the
terms of the Contract with the help of one’s representative be present at the
process of extraction of nickel-cobalt ores carried out by the
Contractor.

    

    Article
13. Nickel-cobalt Ores Measuring

    

    13.1 The
weighing of nickel-cobalt ore as well as determination of its accompanying
components extracted as the exploration of Novo-Shandashinsky,
Vostochno-Shandashinsky, Shandashinsky, Shirpakainsky, Kara-Obinsky and
Steninsky deposits of the Contract territory shall be carried out by the
Contractor in accordance with the methods and practice adopted in the
Republic.

    13.2
Every 6 months Contractor shall with the help of representatives of the
competent authority carry out tests of equipment and devices applied for
weighing and measuring ores at the above-mentioned deposits.

    13.3 In
case the test or inspection reveals some defects of equipment or devices then
with failure to determine the faultiness period, the half of period since the
last time of measurement is considered to be the term of the
defect.

    13.4 In
case Contractor decides to modify the existing methods or change the standard
measuring instruments, he is obliged to notify the Competent authority not later
than 30 days in advance in order to provide the representatives of the authority
with the opportunity to witness all the changes and modifications.

    

    Article
14. Subcontracted Works Implementation

    

    14.1
Contractor within the framework of yearly work program shall provide the
Competent authority with the plan of subcontract works, list of subcontractors
for delivery of materials, equipment and services that are to be concluded for
the next calendar year with the calculation of subcontracts cost as well as the
list of potential local and foreign subcontractors.

    14.2 When
concluding all the subcontracts, the Contractor shall give priority to the
services, equipment, materials and finished commodity produced in the Republic
of Kazakhstan provided they are competitive by ecological and technical
parameters, prices, operational characteristics and terms of
delivery.

    14.3 As a
rule subcontractors shall be attracted by the Contractor on a competition
basis.

    14.4
Contactor is responsible for the performance of subcontract agreements in
accordance with the existing legislation.

    

    Article
15. Financing

    

    15.1
Contractor shall assume responsibility for the complete financing of one’s
activity under Contract in correspondence with the work program approved by the
Parties.

    15.2
Contractor may freely obtain credits in any currency in the Republic and abroad
in order to finance one’s activity unless it is at variance with the existing
legislation of the Republic.

     

    9

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    15.3
Contractor is empowered to open accounts both in national and foreign currency
in the national and foreign banks in order to get financial means for the
performance of the Contract that are represented by receipts and expenditures
stipulated by the Contract.

    15.4 All
kinds of amendments envisaged by the Contract shall be implemented in order
prescribed by the legislation of the Republic.

    15.5
Contractor and subcontractors effect currency transactions in accordance with
the existing legislation of the Republic on currency regulation.

    15.6 Any
losses incurred by the Contractor when extracting nickel-cobalt ores at
Novo-Shandashinsky, Vostochno-Shandashinsky, Shandashinsky, Shirpakainsky,
Kara-Obinsky and Steninsky deposits shall not be indemnified by the
government.

    

    

    Article
16. Taxes and Payments

    

    16.1 When
extracting nickel-cobalt ores Contractor is obliged to pay taxes and make other
payments in correspondence with the tax legislation of the Republic of
Kazakhstan consisting of Decree of the President of the Republic of Kazakhstan
“On taxes and other budget commitments” dated April 24, 1995 #2235, its
amendments and appendixes as in force for the time being as well as other laws,
decrees of the President of the Republic, government resolutions, decisions and
enactments and other sublegislative acts of ministries and departments of the
Republic that have legal force and regulate taxes, payments and duties flowing
to the state budget as well as acts, instructions, explanatory documents of the
Department of tax reforms of the Ministry of finance of the Republic of
Kazakhstan (or any other state authority to which it may be reorganized) that
had been issued in order to interpret the existing legislation.

    16.2 The
Republic of Kazakhstan guarantees that the Contractor shall pay only the
above-stated taxes, payments and duties.

    16.2.1
Income tax of legal
entity. Contractor shall pay income tax in accordance with the rates
determined in the issues 30-33 of the Decree of the President of the Republic of
Kazakhstan “On taxes and other budget commitments” dated April 24, 1995 #2235
(hereinafter referred to as Tax Code), Contactor takes responsibility for the
completeness of assessments and transfer of income tax to the budget. At that
income tax is deducted from the paying source in correspondence with the rates
stipulated by the legislation as in force for the time being excluding dividend
tax deducted by rates valid for the moment of Contract signing.

    16.2.2
Income tax of natural persons –
employees of the Contractor is deducted by legislation rates as in force
for the time being.

    16.2.3
Value Added Tax is deducted by rates envisaged by Article 66 of the Tax
code.

    16.2.4
Excises, if necessary, are paid by rates envisaged by Article 77 of the Tax
code.

    16.2.5
Securities business tax is paid by rates envisaged by Article 89 of the Tax
code.

    16.2.6
Land tax is paid by rates of Tax legislation as in force for the time
being.

    16.2.7
Transport tax is paid in amount indicated in the Article 128 of the Tax
code.

    16.2.8
Property tax of legal entity is paid in amount envisaged by Article 133 of the
Tax code.

    16.2.9
Auction sales tax when needed is paid in amount envisaged by legislation as in
force for the time being.

    16.2.10
Legal entity registration duty shall be paid in amount envisaged by legislation
as in force for the time being.

    16.2.11
Charge for the right to perform separate forms of activity shall be paid in
amount envisaged by legislation as in force for the time being.

    16.2.12
Tax payments shall be charged in accordance with the legislation as in force for
the time being.

    16.2.13
Water charge shall be paid in amount envisaged by legislation as in force for
the time being. Charge for the water extracted at the same time with other
mineral resources out of mines and open pits and water used repeatedly is not
paid.

     

    10

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    16.2.14
Forestry tax if necessary is paid in amount envisaged by legislation as in force
for the time being.

    16.2.15
Charges to the Conservation Foundation shall be made by rates envisaged by local
government authorities. Fines and payments for environmental legislation
violations are charged by rates envisaged by existing legislation.

    16.2.16
Contractor guarantees compensation of the budget expenses for the geological
survey realized on the contract territory at the expense of state budget during
the period of deposit development.

    16.2.17
Payments to the Road fund are made in accordance with the Decree of the
President of the Republic of Kazakhstan “On Road Fund” dated December 21, 1995
#2701.

    16.2.18
Payments to the state employment fund, state social insurance fund, fund of
compulsory medical insurance and state pension fund are made in accordance with
the existing legislation.

    16.2.19
Special taxes and payments of subsurface users:

                a)  Signature bonus is paid in
amount of 5000 USD not later than 20 days after signing the Contract by the
Competent authority.

                b)
Commercial discovery bonus is paid by zero rate.

                c)
Extraction bonus is paid by zero rate.

                d)
Royalty is paid in amount of 2.21% of the total volume of salable ore at a price
of metals extracted out of nickel-cobalt ores. Royalty is paid monthly, not
later than the 10th day
of the month following the accounting period. Royalty may be charged in natural
form after coordination with the government of the Republic of Kazakhstan or
with Competent authority acting on behalf of the government.

    In this
case the government of the Republic of Kazakhstan is obliged not later than 60
days beforehand to warn the Contractor and coordinate all the points, terms,
quantity and other terms of delivery of raw materials.

                 e)
Excess profits tax rates are settled in the following amounts depending on
achieved internal rate of return:

    

    

    
      	
              Internal
      rate of return, %

            	
              Ratio
      of excess profit tax rate (expressed in%) 
to the net profit for
      financial year

            
	
              Less
      or equal to 20%

            	
              0

            
	
              More
      than 21% but less or equal to 22%

            	
              4

            
	
              More
      than 22% but less or equal to 24%

            	
              8

            
	
              More
      than 24% but less or equal to 26%

            	
              12

            
	
              More
      than 26% but less or equal to 28%

            	
              18

            
	
              More
      than 28% but less or equal to 30%

            	
              24

            
	
              More
      than 30%

            	
              30

            

    

    

    

    16.3
Contractor shall inform its subsidiaries and subcontractors that provide
services about the fact that they and their staff shall pay taxes in
correspondence with the legislation of the Republic of Kazakhstan as in force
for the time being.

    16.4
Foreign employees shall pay income tax of natural persons and other types of
taxes in accordance with the tax legislation of the Republic as in force for the
time being in case other provisions are envisaged by the ratified international
agreements. In such cases the ratified international contracts in accordance
with the clause 3 of article 4 of the Constitution of the Republic of Kazakhstan
shall prevail over internal legislation.

    16.5 If
in commercial and financial operations the Contractor uses prices different from
those applied among independent enterprises, then Tax service for tax purposes
may correct the tax-payers’ profit due to the price difference. Performing such
operations is intended to determine their real essence and impose
penalties.

     

    11

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    16.6 Any
taxes and payments stipulated by the present Contract shall be paid in terms
stipulated by the legislation of the Republic of Kazakhstan and the present
Contract. All the taxes, payments and duties shall be paid in tenge or any
currency as agreed between Contractor and the government of the Republic of
Kazakhstan and shall be entered in an order approved by the legislation of the
Republic in accounts indicated by authorities of tax and finance services of the
Republic.

    16.7
Neither activity (operations, actions) of Contractor representing mining
operations under the Contract, nor taxes and payments paid by the Contractor
under the present Contract shall not release the Contractor from paying taxes
and payments for activity (operations, actions) not related to the mining
activity as well as shall not change the paying obligations anyway. Taxes and
payments not connected with the mining operations but envisaged by the Contract
shall be paid in correspondence with the existing legislation.

    16.8
Contractor affirms that tax authorities of the Republic of Kazakhstan shall have
access to the information concerning and bank accounts of the Contractor
including those opened in foreign banks abroad. Contractor agrees to provide the
tax authorities of the Republic of Kazakhstan with any information related to
such accounts that may be enquired from time to time and thus refuses of
confidentiality for the information of these accounts that may exist in
accordance with the regulations on bank secret and in correspondence with any
other similar laws.

    16.9
Punitive penalties, interests and fines for untimely tax payments to the budget
as well as concealment of income, wrong taxation and other violations of tax
legislation are applied in accordance with the tax legislation as in force for
the time being.

    16.10
Profits gained from transfer of authority shall be taxable in correspondence
with the general tax legislation.

    16.11
Contractor has no right to join receipts and expenditures in order to determine
any taxes and payments provided he carries out activity under several Contracts
concluded with the Competent authority.

    16.12 Tax
stabilization

    16.12.1
Tax regime established by the present Contract concluded in approved order and
confirmed by compulsory tax expertise in the tax committee of Ministry of
finance of the Republic of Kazakhstan or any other authorized agency shall stay
immutable till cessation of the Contract except special cases and conditions
stipulated by the present clause.

    16.12.2
Any amendments to the tax legislation of the Republic introduced after signing
the present Contract shall not influence tax obligations of the Contractor
except cases when such amendments in their essence are the alteration of the tax
envisaged by the present Contract and does not change the level of taxation as
compared to the moment of Contract signing.

    16.12.3
Amendments to the legislation imply establishment of new conditions and rules
that differ from rules and conditions stated in the Contract and that are
realized with the help of the following methods:

    
      	
              ·  

            	
              Adoption
      of  new acts that are effective as
  law;

            

    

    
      	
              ·  

            	
              Introduction
      of any changes or amendments to the acts effective as
  law;

            

    

    
      	
              ·  

            	
              Effectiveness
      of international agreements and/or modification of terms and conditions of
      such international agreements whose implementation influences the
      application of internal acts effective as
law.

            

    

    
      	
              ·  

            	
              Adoption
      of new acts and introduction of changes to the effective sublegislative
      acts.

            

    

    16.12.4
Un case of introduction of amendments to the tax legislation, effectiveness of
international agreements or their cessation that will take place after signing
the Contract and that will result in impossibility of following the initial
terms of the Contract, the Contractor and the competent authority as well
representatives of tax authorities shall immediately gather and after reaching
consensus shall introduce all the necessary amendments and alterations to the
present Contract in order to restore economic interests of the Parties that were
as in force at the moment of signing the Contract.

     

    12

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    16.12.5 The
provisions of this issue shall be applied to all types of taxes and payments
except cases stipulated by the present clause.

    
      	
              16.12.6  

            	
              Contractor
      shall within 10 days after the date of Contract effectiveness provide the
      following tax authorities with the copies of the
  Contract:

            

    

    
      	
              ·  

            	
              Local
      departments;

            

    

    
      	
              ·  

            	
              Department
      of tax reforms of Ministry of finance of the Republic of Kazakhstan that
      is responsible for tax inspection.

            

    

    

    

    Article
17. Accounting

    

    Contractor
shall carry out complete and accurate accounting of all the receipts and
expenditures connected with the development of mineral resources deposits in
correspondence with the Decree of the President of the Republic of Kazakhstan
“On Accounting” #2732 dated December 26, 1995.

    17.1
Contractor shall keep books and settle accounts by all types of financial
activity under the Contract and shall keep all the account books and
registration documents for exact reflection of expenses by various works as well
as for reflection of quantitative and monetary values of the extracted
product.

    17.2
Contractor shall provide the Competent authority with the corresponding written
reports in an order stipulated by the clause 6.2 of the present
Contract.

    17.3
Competent authority is empowered to revise all the account books and
registration documents of the Contractor once a year. The Contractor shall be
notified of such revision 30 days in advance. Such revision shall not disturb
the normal course of deposit exploration.

    17.4
Revisers have access to all the account books, material and other information
and if necessary may inspect production divisions and sections within deposit
area.

    17.5 When
notified of violations revealed as a result of the revision, the Contractor
shall in proper time within 60 days eliminate these defects and inform the
Competent authority.

    

    

    Article
18. Insurance

    

    18.1
Within 30 days after signing the Contract, the Contractor shall elaborate and
submit to the Competent authority the insurance program on insuring property and
responsibility connected with the extraction of nickel-cobalt ores at
Novo-Shandashinsky, Vostochno-Shandashinsky, Shandashinsky, Shirpakainsky,
Kara-Obinsky and Steninsky deposits stipulated by the present
Contract.

    18.2
Insurance is envisaged for property risks and responsibility risks related
to:

    
      	
              ·  

            	
              Transportation
      and storage of goods delivered to the site of ore extraction of the
      above-stated deposits;

            

    

    
      	
              ·  

            	
              Contractor’s
      property used in the process of nickel-cobalt ores extraction including
      rented or leased property;

            

    

    
      	
              ·  

            	
              Pollution
      of environment, including land and expenses for damage consequences
      elimination including melioration and land
  restoration;

            

    

    
      	
              ·  

            	
              General
      civil and legal responsibility before third
  parties.

            

    

    18.3
Personal death insurance as a result of accident or physical injuries is
registered for the staff hired for extraction of polymetallic ores at the
above-mentioned deposits in accordance with the legislation of the
Republic.

     

    13

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    18.4
Contractor shall provide medical insurance, industrial injuries insurance and
professional diseases insurance.

    18.5
Contractor shall provide his workers with the social insurance.

    18.6
Contractor may choose insurance companies at his own discretion in
correspondence with the legislation of the Republic.

    

    Article
19. Liquidation and Liquidation Fund

    

    19.1 Six
months before the Contract cessation, the Contractor shall submit to the
Competent authority a program of elimination of activity consequences as
stipulated by the present Contract including liquidation expenses
estimate.

    19.2
Liquidation and conservation of activity is realized in accordance with the
order stipulated by the government.

    19.3 The
liquidation program shall envisage elimination of constructions and equipment
used by the Contractor in the process of its activity on the contract
territory.

    19.4 In
order to provide complete financial security of liquidation program, the
Contractor shall establish a liquidation funs in amount of 1% of annual rate of
production sales. Contractor shall control the work of the liquidation fund.
After approval of restoration expenses estimate, the rate of the fund may be
revised.

    19.5 The
rate of annual liquidation assessments is determined in accordance with the
order established by the government. Annual assessments to the liquidation fund
made by the Contractor are included to the extraction content and are calculated
by multiplication of monthly amount of nickel-cobalt ores extraction to the rate
of liquidation assessments.

    19.6 If
actual expenses for liquidation exceed the rate of liquidation fund, then the
Contractor makes additional financing owing to reserves intended for unforeseen
expenses.

    19.7 If
actual expenses for liquidation turn out to be less than the rate of liquidation
fund, then the excessive financial means are transferred to the Contractor and
shall be included to the taxable income.

    19.8 If
the government decides to further use all or some part of constructions
transferred to the Contractor after cessation of the Contract then the
Contractor shall not bear any responsibility for realization of liquidation
program and transfers to the state all the authorities for all the actual assets
accumulated in the liquidation fund.

    

    Article
20. Conservation of Mineral Resources and Environment

    

    20.1 When
performing the Contract, the Contractor shall observe the legislation of the
Republic that refer to the conservation of environment and mineral resources and
take all the necessary measures in order to:

    
      	
              ·  

            	
              Secure
      life and health of the population;

            

    

    
      	
              ·  

            	
              Secure
      rational and complex usage of natural
resources;

            

    

    
      	
              ·  

            	
              Preserve
      natural landscapes and restore destroyed land and other geomorphologic
      structures;

            

    

    
      	
              ·  

            	
              Preserve
      characteristics of energetic condition of upper layers to prevent
      earthquakes, landslides, floods and subsidence of
  rocks.

            

    

    

    20.2 When
developing Novo-Shandashinsky, Vostochno-Shandashinsky, Shandashinsky,
Shirpakainsky, Kara-Obinsky and Steninsky deposits, the Contractor shall first
of all observe:

    I. Environmental
challenges:

    
      	
              ·  

            	
              Preservation
      of surrounding;

            

    

    
      	
              ·  

            	
              Prevention
      of man-caused desertification;

            

    

    
      	
              ·  

            	
              Prevention
      of water and wind erosion of soil;

            

    

    
      	
              ·  

            	
              Isolation
      of absorbing and freshwater horizons in order to avoid their
      pollution;

            

    

    
    

    
    

     

    14

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    
      	
              ·  

            	
              Prevention
      of exhaustion and pollution of underground
  waters;

            

      
        	
                ·  

              	
                And
      other requirements in accordance with the legislation on subsurface
      management and preservation of
environment.

              

      

    

    
 

    II. Requirements for conservation of
earth resources:

    
      	
              ·  

            	
              Secure
      complete geological survey of the earth’s resources in order to correctly
      estimate the amount and structure of reserves and parts of nickel-cobalt
      ores deposits given for subsurface usage including the purposes not
      connected with the extraction;

            

    

    
      	
              ·  

            	
              Secure  rational
      and complex usage of resources at all the stages of the stated deposits of
      nickel-cobalt ores;

            

    

    
      	
              ·  

            	
              Secure
      complete extraction of nickel-cobalt reserves of main and accompanying
      natural resources as well as associated components and industrial waste as
      a result of exploration of nickel-cobalt ores
  deposits;

            

    

    
      	
              ·  

            	
              Use
      mineral resources in correspondence with the requirements of the
      legislation on preservation of surroundings in order to avert negative
      impact of dangerous man-caused processes by extraction of nickel-cobalt
      ores;

            

    

    
      	
              ·  

            	
              Conserve
      mineral resources from floods, fires and other natural disasters that may
      worsen their quality or complicate exploitation and development of
      nickel-cobalt deposits;

            

    

    
      	
              ·  

            	
              Prevent
      soil pollution by exploration of these
deposits;

            

    

    
      	
              ·  

            	
              Observe
      the order of cessation or suspense of extraction process stipulated by
      issue 29 of the Contract and order of liquidation of exploration objects
      of Novo-Shandashinsky, Vostochno-Shandashinsky, Shandashinsky,
      Shirpakainsky, Kara-Obinsky and Steninsky deposits stipulated by article
      19 of the present Contract;

            

    

    
      	
              ·  

            	
              Observe
      environmental challenges by storage and placing of industrial and domestic
      waste in order to prevent their accumulation at columbine area and in
      areas of underground waters.

            

    

    

    20.3
Before starting subsurface operations under the present Contract, the Contractor
shall estimate the probable impact of planned activity to the surroundings get
permission for subsurface usage in corresponding state environmental
agencies.

    20.4
Contractor shall monitor mineral resources and environment in order to estimate
the impact of its activity and take measures to timely eliminate the negative
impact.

    20.5
Contractor shall eliminate the breach of environmental balance, carry out
restoration works and fully compensate the damage caused.

    20.6
State control over observance of the existing legislation on preservation of
surroundings and mineral resources is realized by authorized state
bodies.

    20.7
Contractor shall carry out works for conservation of environment of the contract
territory.

    20.8
After cessation of the Contract or by gradual return of the contract territory,
the Contractor transfers the contract territory in condition suitable for
further usage in correspondence with the legislation of the
Republic.

    20.9 Any
damage caused to the environment as well as to the contract territory itself
during the Contract performance shall be restored at the expense of the
Contractor till condition suitable for further usage.

    

    Article
21. Population and Personnel Security

    

    21.1 When
extracting nickel-cobalt ores at Novo-Shandashinsky, Vostochno-Shandashinsky,
Shandashinsky, Shirpakainsky, Kara-Obinsky and Steninsky deposits, Contractor
shall guarantee observance of sanitary norms and regulations for secure work
realization foreseen by the legislation of the Republic as well as preventive
measures for liquidation of accidents, professional diseases.

     

    15

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    21.2
Should any danger for people’s life and health arise exploration of the
nickel-cobalt ore deposits shall be forbidden.

    21.3
State control over observance of the norms and standards for accident prevention
and industrial sanitary by exploration of Novo-Shandashinsky,
Vostochno-Shandashinsky, Shandashinsky, Shirpakainsky, Kara-Obinsky and
Steninsky deposits shall be realized by special authorized state
agency.

    21.4
Basic requirements for safe exploration of nickel-cobalt deposits are as
follows:

    
      	
              ·  

            	
              Works
      shall be implemented by people who have special training and qualification
      while administrative work shall be realized by staff with special
      education.

            

    

    
      	
              ·  

            	
              Personnel
      shall be provided with the overalls and means of individual and collective
      protection.

            

    

    
      	
              ·  

            	
              Machinery,
      equipment and materials applied shall correspond to safety and sanitary
      norms.

            

    

    
      	
              ·  

            	
              Explosives
      shall be taken stock of and stored and consumed
  properly.

            

    

    
      	
              ·  

            	
              A
      number of geological, mine-surveyor and other observations shall be
      conducted in order to provide technological cycle of works and dangerous
      situations forecasting.

            

    

    
      	
              ·  

            	
              Technical
      documentation and accidents liquidation plans shall be timely replenished
      with the data clarifying the limits of areas of safety works
      realization.

            

    

    
      	
              ·  

            	
              Project
      systems of deposits development shall be strictly
  observed.

            

    

    
      	
              ·  

            	
              The
      range of sanitary-protective zones at Novo-Shandashinsky,
      Vostochno-Shandashinsky, Shandashinsky, Shirpakainsky, Kara-Obinsky and
      Steninsky deposits shall be determined on the basis of dispersion
      estimate.

            

    

    
      	
              ·  

            	
              Surface
      concentration of harmful substances not exceeding the allowed limits for
      the settlements shall be observed on the borders of sanitary-protective
      zones.

            

    

    
      	
              ·  

            	
              Draft
      amendment of National sanitary and epidemiological service of the Republic
      of Kazakhstan shall be revised within 6 months after the Contract
      registration and submitted to the authorities of the National sanitary and
      epidemiological service. (letter $41-2.9-1410 dated
    05.11.96)

            

    

    
      	
              ·  

            	
              Sanitary
      and hygienic measures shall be taken to prevent diseases caused by
      temporary disability as well as professional
  diseases.

            

    

    
      	
              ·  

            	
              Special
      conditions shall be created for health
  promotion.

            

    

    
      	
              ·  

            	
              Existing
      sanitary legislation, sanitary norms and hygienic standards shall be
      strictly observed.

            

    

    
      	
              ·  

            	
              Preliminary
      and regular medical examinations shall be organized for the employees who
      work in harmful and unfavorable
conditions.

            

    

    
      	
              ·  

            	
              Laboratory
      control over airspace in the working area and over dangerous and harmful
      industrial factors (such as noise, vibration, heaviness, tension and
      etc.)at working places shall be organized
  regularly

            

    

    
      	
              ·  

            	
              Contractor’s
      official with appearance of direct threat for people’s life and health
      shall immediately stop the works and provide the transportation of people
      to safe places and notify Competent authority as well as local executive
      powers.

            

    

    

    Article
22. Parties’ Responsibility for the Contract Terms Violation

    

    22.1 All
the transactions closed by the Contractor in direct or indirect form that
violate the requirements of the License and the Contract shall be declared
invalid.

    22.2
Contractor bears full responsibility before the Competent authority and third
parties for the consequences of actions stated in clause 20.1 of the present
Contract.

    22.3
Persons guilty of concluding the mentioned bargains as well as of other
violations of the legislation on subsurface management shall bear
statute-established disciplinary, material, administrative and criminal
liability.

     

    16

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    

    Article
23. Force Majeur

    

    23.1
Neither of the Parties shall bear responsibility for breach of any obligations
stipulated by the Contract if such violation was caused by
force-majeur.

    23.2 To
force-majeur belong emergency and unforeseen situations such as war conflicts,
natural disasters and calamities (fires, etc.). But the given list is not
exhaustive.

    23.3
Should any force-majeur circumstances arise, the Party that had suffered from it
shall immediately notify the other Party by post or personally thus clarifying
the date of beginning of such circumstances and describing the
situation.

    23.4 By
force-majeur circumstances the Parties shall call a meeting in order to find any
solution out of the situation and shall use all the means possible to minimize
the consequences.

    23.5
Should any circumstances arise which make complete or partial fulfillment by
either party of its obligations under the present Contract impossible, the time
stipulated for the fulfillment of these obligations shall be extended for as
long as these circumstances prevail.

    

    

    Article
24. Confidentiality

    

    24.1
Information received by any Party during the Contract execution shall be
considered confidential provided it is agreed between the Parties.

    24.2
Parties have no right to disclose any such confidential information to any third
parties without consent of other Party except cases when:

    
      	
              ·  

            	
              Such
      information is used in the course of legal
  proceedings;

            

    

    
      	
              ·  

            	
              Such
      information is given to third parties hired be the Contractor provided
      this third party takes liability for considering this information as
      confidential and use it only for the purposes and terms determined by the
      Parties;

            

    

    
      	
              ·  

            	
              Such
      information is introduced to the bank or any other financial establishment
      where the Contractor gets financial means provided this third party takes
      liability for considering this information as confidential and use it only
      for the purposes and terms determined by the
  Parties;

            

    

    24.3
Parties basing on existing legislation determine the terms of confidentiality
for all the documents, information and reports connected with the extraction of
nickel-cobalt ores on the contract territory.

    

    Article
25. Transfer of Authority and Obligations

    

    25.1
Transfer of authority and obligations to the third party (except branch
establishments of the Contractor) is allowed only with the permission of the
license authority.

    25.2
Expenses related to the transfer of authority and obligations under the present
Contract shall be borne by the Contractor and compensated by the
government.

    25.3 As
long as the Contractor shares the rights and obligations under the Contract with
the third parties they all shall carry solidary liability.

    

    Article
26. Applicable Law

    

    26.1 The
Contract and other agreements signed on the basis of the Contract shall be
interpreted in accordance with the legislation of the Republic of
Kazakhstan.

    26.2
Contractor bears responsibility for performance of the international obligations
in the sphere of conservation of surroundings on the contract territory and
areas adjacent to it.

     

    17

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    

    Article
27. Dispute Resolution

    

    27.1 All
disputes in connection with this Contract shall be settled in an amicable
way.

    27.2
Should the Parties fail to reach amicable settlement within 60 days, the dispute
shall be settled by the court authorized or by the board of domesticities of the
Supreme Court of the Republic of Kazakhstan. The decision of such authorities
shall be considered final and compulsory for each Party.

    

    Article
28. Contract Stability Guarantees

    

    28.1
Provisions of the Contract shall stay invariable for the whole period of
Contract performance.

    28.2 All
the alterations and supplements t the legislation that might worsen the
Contractor’s situation adopted after signing the Contract shall not be applied
to the present Contract.

    28.3 In
case of such alterations and supplements stipulated by the clause 28.2, the
Parties shall be guided by the clause 16.11 of the present
Contract.

    

    Article
29. Terms of Cancellation and Termination of the Contract

     

    29.1 Competent
authority shall immediately interrupt the performance of the Contract
if:

    
      	
              ·  

            	
              The
      License is suspended;

            

    

    
      	
              ·  

            	
              There
      is a direct threat for life and health of people working or living in an
      industrial area connected with the performance of the
      Contract.

            

    

    
      29.2
Competent authority is empowered to suspend the Contract in case
if:

    

    
      	
              ·  

            	
              Contractor
      carries out activity not stipulated by the work
  program;

            

    

    
      	
              ·  

            	
              Contractor
      in the course of activity violates the legislation of the Republic of
      Kazakhstan on conservation of mineral resources and environment and
      breaches safe working conditions;

            

    

    
      	
              ·  

            	
              Contractor
      is declared bankrupt in accordance with the legislation of the Republic of
      Kazakhstan.

            

    

    29.3 In case
of suspense of the Contract, the Competent authority shall notify the Contractor
of the reasons for such suspense in a written form and set reasonable terms for
its elimination.

    29.4 After
notification of the elimination of the causes for suspense, the Contract shall
be resumed.

    29.5 The
Contract shall be ceased before the appointed time only in the following
cases:

    
      	
              ·  

            	
              When
      the Contractor fails to eliminate the reasons for suspense of the Contract
      or when the Contractor fails to eliminate them the time limits set by the
      Competent authority;

            

    

    
      	
              ·  

            	
              When
      the License is ceased before the appointed
time;

            

    

    
      	
              ·  

            	
              When
      the Contractor is invalidated in accordance with the legislation on
      subsurface management;

            

    

    
      	
              ·  

            	
              When
      the court confirms the fact of violation of legislation by signing and
      registering of the Contract;

            

    

    
      	
              ·  

            	
              When
      the court confirms the fact of serious discrepancies either in terms of
      the contract and the license or in competitive terms on the basis of which
      this License had been granted to the
Contractor;

            

    

    
      	
              ·  

            	
              When
      the Contractor violates the terms of full or partial transfer of authority
      to any third party in accordance with the article 25 of the Present
      Contract.

            

    

    
    

    
    

    
    

    
    

     

    18

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    
      	
              ·  

            	
              When
      the court confirms the fact that the Contractor had on purpose provided
      the Competent authority with or any other governmental authority with the
      false information concerning extraction of nickel-cobalt ores on the
      contract territory;

            

      
        	
                ·  

              	
                When
      the Contractor repeats the actions that caused the Contract suspense
      earlier;

              

      

      
        	
                ·  

              	
                When
      the Contractor interrupts the production process within the framework of
      the work program for more than 90  days except cases of
      force-majeur;

              

      

      
        	
                ·  

              	
                When
      any of the Parties breaches confidentiality stipulated by the present
      Contract.

              

      

    

    29.6 Contractor
shall cease the Contract for the reasons stated in clause 29.5 of the present
Contract within 60 days receiving a correspondent written notification from the
Competent authority.

    29.7 Parties
shall not be liberated from current obligations that were left unfulfilled to
the moment when the Contractor was notified of cessation of the
Contract.

     

    Article
30. The Language of the Contract

    

    30.1 The
Present Contract as well as its appendixes and supplementary documents being the
part and parcel of the present Contract shall be drawn up in
Russian.

    30.2 The
Parties agree that both Kazakh and Russian shall be used for communicative
purposes. Starting from the moment of signing the contract the major part of
technical documentation and information concerning the process of exploration of
nickel-cobalt ores shall be drawn up on Russian.

    30.3 Al
the tables and other accounting documents shall be printed with the headings
both in Kazakh and Russian and may be filled in either in Kazakh or
Russian.

    30.4 Any
documents and information referring to administrative activity shall be made up
in Kazakh and Russian.

    

    Article
31. Other Provisions

    

    31.1 All
the notifications and documents for Contract execution shall be considered as
provided and delivered properly by each Party only when it can be confirmed by
facts.

    31.2
Notifications and documents shall be handed over either personally or sent by
post, air, telex or telegraph to the following addresses:

    

    Ministry
of energy and natural resources of the Republic of Kazakhstan:

    480091
Almaty, Bogenbay Batyr Str., 142

    Tel: +7
3272 62-64-10

    

    Kazkh-Russian-Belorussian
joint venture “Kempirsaysky mine group”

    464830
Aktyubinsk oblast, pos. Batamshinsky, Lenin Str., 30

    Tel: 2-20
21-65

    

    31.3 By
any change of addresses, each of the Parties shall timely notify the other Party
in a written form.

    31.4 All
the supplements and appendixes to the present Contract shall be considered its
part and parcel.  In case of any differences found between provisions
of appendixes and the Contract, the Contract shall prevail.

    31.5 All
the amendments and supplements to the Contract shall be made after written
consent of the Parties provided they do not contradict the terms of the
License.

     

    19

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    The
present Contract has been concluded on 15 July, 1997 in Almaty, Republic of
Kazakhstan by the plenipotentiaries of the Parties.

    

    

    

    Minister
of energy and natural
resources           Joint
venture “Kempirsaysky mine group”

                                                                                                               Chief
executive

    

    

    Signature________________________                 Signature___________________________

    

     

     

    20ex1026k123109.htm

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    Exhibit
10.26

    

    

    

    State
registration No. 546 as of 10.10.2000

    

    

    

    

    

    

    

    

    

    ADDENDUM
to the Contract

    

    as
of 15 July 1997 for mining of nickel-cobalt ore at
Novo-Shandashinsk,

    East
– Shandashinsk, III -  Shandashinsk, Shirpakainsk, Kara-Obinsk and
Stepninsk deposits in Aktyubinsk oblast of the Republic of
Kazakhstan

    in accordance with the Licenses
series MG Nos. 414, 415, 420, 421, 425 and 426 

    as of 12 October 1995
between the Ministry of Energy and Mineral Resources

     of
the Republic of Kazakhstan and Joint Venture “Kempirsaisk Mine
Group”

    

    

    between

    

    the
Investment Agency of the Republic of Kazakhstan

    

    and

    

    “Kyzyl
Kain Mamyt” LLP that re-executed Government Licenses series MG Nos. 420 and 426
in accordance with resolutions of the Government of the Republic of Kazakhstan,
No. 24 as of 6 January 2000 and No. 408 as of 18.08.2000

    

    

    

    

    

    

    

    

    

    

    

    

    

    

    

    

    

    Astana,
2000

    

    

    

    (English
Translation)

    

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    Present
addendum to the Contract as of 15 July 1997 for mining of nickel-cobalt ore at
Novo-Shandashinsk, East – Shandashinsk, III -  Shandashinsk,
Shirpakainsk, Kara-Obinsk and Stepninsk deposits in Aktyubinsk oblast of the
Republic of
Kazakhstan was made on 10.10.2000 between the Investment Agency of the
Republic of Kazakhstan (hereafter referred to as “Competent Body”) and “Kyzyl
Kain Mamyt” LLP (hereafter referred to as “Contractor”) due to transfer of the
subsurface use right from Joint Venture “Kempirsaisk Mine Group” to “Kyzyl Kain
Mamyt” LLP under
Licenses series MG No. 420 and 426.

    

    Since:

    

    1.           Government
Licenses for the subsurface use right series MG No. 420 and 426
issued

    to JV
“Kempirsaisk Mine Group” were re-executed to “Kyzyl Kain Mamyt” LLP in
accordance with the resolution of the Government of the Republic of Kazakhstan
No. 24 as of 6 January 2000

    

     
 

    The
Competent Body and the Contractor have agreed to introduce changes and
amendments to the Contract as follows:

    

    1.           Clauses
10, 12 and 20 in Section 1 of the Contract shall be read as
follows:

    

    
      	
              1.10.

            	
              Competent
      Body  (authorized state body) means the Investment Agency of the
      Republic of Kazakhstan.

            

    

    

    
      	
              1.12.

            	
              Contract
      Territory means the territory defined in mining allotments where the
      subsurface user is entitled to mine nickel-cobalt ore at Kara-Obinsk and
      Novo-Shandashinsk deposits.

            

    

    

    1.20.           Contractor
means the subsurface user, “Kyzyl Kain Mamyt” LLP

    

    

    
      	
              2.

            	
              In
      the Contract the words JV “Kempirsaisk Mine Group” to change to the words
      “Kyzyl Kain Mamyt” LLP, and the words “Ministry of Energy and Mineral
      Resources of the Republic of Kazakhstan” to “Investment Agency of the
      Republic of
      Kazakhstan”, accordingly.

            

    

    

    
      	
                    
                3.

              

            	
              To delete the
      words “III -  Shandashinsk, Shirpakainsk, East – Shandashinsk,
      Stepninsk deposits of cobalt-nickel ore and licenses series MG, Nos. 414,
      415, 421 and 425”  in the
Contract.

            

    

    

    
      	
              4.

            	
              Sub-clause
      3.2. in Section 3 shall be read as
follows:

            

    

    

    
      	
               3.2

            	
              The
      Contract expires on 12 October 2011 (on the last day of the term of
      License series MG No. 420).

            

    

    

    
      	
              5.

            	
              5.Sub-clause
      4.1. in Section 4 shall be read as
follows:

            

    

    

    
      	
              4.1

            	
              The Contractor
      mines cobalt-nickel ore at the Kara-Obinsk and Novo-Shandashinsk
      deposits within the Contract Territory under Licenses series MG No. 420
      and 426 and in accordance with the provisions of the
    Contract.

            

    

     

    
      	
              6.

            	
              In
      sub-clauses 5.4., 5.5., 5.6 and 5.7 in Section 5 to change the words
      “KAZGOSNEDRA” Main Administration for Mineral Resources to the words
      “Committee of Geology and Subsurface Protection under the Ministry of
      Natural Resources and Environmental Protection of the Republic of
      Kazakhstan”.

            

    

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

     

    
      	
               7.

            	
              Sub-clause
      7.2.11 in Section 7 shall be read as
follows:

            

    

     

    
      	
              7.2.11

            	
              The
      Contractor for mandatory production training and re-traning of the
      personnel and computerization will spend at least 0.1 (point one) % of the
      production costs.

            

    

    

    
      	
               8.

            	
              Sub-clause
      11.1 in Section 1.1. shall be read as
follows:

            

    

    

    
      	
              11.1

            	
              The
      Contractor is provided with the exclusive right for production at the
      Contract Territory for 11 (eleven) consecutive years till 12 October
      2011.

            

    

     

    
      	
               9.

            	
              Sub-clause
      13.2 in Section 13 shall be read as
follows:

            

    

    

    
      	
              13.2.

            	
              The
      Contractor shall test the equipment and devices used for ore weighing and
      measurement at the said deposits 1 (one) time a year together with the
      representatives of the Authorized
Body

            

    

    

    
      	
               10.

            	
              Sub-clause
      13.2 in Section 31 shall be read as
follows:

            

    

    

    
      	
              31.2

            	
              Notices
      and documents shall be delivered in hand or sent by post, registered
      airmail, fax, by telex at the following
  addresses:

            

    

                                                                                  

    
      	
              Investment Agency
of the
      Republic of Kazakhstan

              473000,
      Astana, Zhenis Ave. 33

              Fax:
      (3172) 118 158

              Tel.
      (3172) 118 161

               

              Kuanyshev
      D.O.

              Chairman

            	
              “Kyzyl Kain Mamyt”
      LLP

              469830,
      Aktyubinsk oblast

              Kargalinsk
      region, Badamninsk village Lenin str., 20

              Fax:
      (31342) 21 301

              Tel.
      (31342) 21 301

              Raimbergenov
      A.I.

              Director

            

    

    

    

     

    
      	
              11.

            	
              To
      accept a new Work Program in Appendix 1a instead of
      Appendix 1 to the Contract
      “Work Program”.

            

    

     

    

     

    Present
addendum to the Contract was made on 10 October 2000 in Astana, the Republic of
Kazakhstan and signed by the authorized representatives of the
Parties.

     

    

     

    

     

    

     

    COMPETENT
BODY                                                                           CONTRACTOR

     

    (signature)                                                                                      
       (signature)

     

    Chairman                                                                                       
         Director

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00171-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00171-of-00352.parquet"}]]