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			EXHIBIT 10.1

		

		MAGNUS INTERNATIONAL RESOURCES INC.

			101 Convention Center Drive, 7th Floor

			Las Vegas, Nevada 89109

			Tel: (888) 888-1494

		July 25, 2005

		

		To:

			THE BOARD OF DIRECTORS OF

					FIRST FORTUNE INVESTMENTS INC. 

			Suite 1103, 1166 Alberni St.

			Vancouver, B.C. V6E 3Z3

		

		Dear Sirs/Mesdames:

			

		

			Re:	OFFER BY MAGNUS INTERNATIONAL RESOURCES INC. ("MAGNUS") TO ACQUIRE ALL OF THE ISSUED AND OUTSTANDING SHARES OF GOLDEN RIVER RESOURCES CORP. ("GOLDEN RIVER") FROM THE SOLE OWNER OF SUCH SHARES, FIRST FORTUNE INVESTMENTS INC. ("FIRST FORTUNE")                                                            

		

		Subject to and in accordance with the terms and conditions contained herein, this binding letter agreement (the "Letter Agreement") will set forth the basic understanding, terms and conditions relating to the acquisition of all of the issued and outstanding shares of capital stock (the "Shares") of Golden River, a company organized under the laws of the Province of British Columbia, from First Fortune, a company organized under the laws of the Province of British Columbia, by Magnus, a company organized under the laws of the State of Nevada (the "Transaction").
		

		By execution of this Letter Agreement, the parties agree to enter into a more formal purchase agreement by way of a share purchase agreement (the "Formal Agreement") and other documents that more fully delineate and formalize the terms outlined in this Letter Agreement, failing which the following terms will apply:

		

		1.             Form of Transaction.     First Fortune will transfer all of the Shares to Magnus, in exchange for Magnus paying US$400,000 (within 10 calendar days of the execution of this Letter Agreement), which amount is to be held in trust by Devlin Jensen (the "Escrow Agent"), and which is to be paid as follows:

		

		(a)           the Escrow Agent will directly reimburse Geology Brigade 209 of the Nuclear Industry of Yunnan Province ("Team 209") for all expenses incurred, which amount shall not exceed US$100,000, on behalf of First Fortune for Golden River's outstanding debt owing to Team 209 (the “Debt”) with respect to operating costs of Yunnan Western Mining Ltd. ("Western Mining"), the sinoforeign joint venture company organized under Chinese Law in which Golden River has the right to earn a 90% interest under a co-operative joint venture agreement (the "JV Agreement") entered into between Team 209 and Golden River on August 29, 2003 upon the conditions in (b)(i) and (b)(ii) being satisfied.  Upon satisfaction of the Debt, such satisfaction to be mutually agreed between Team 209 and Magnus, any remaining balance on the $100,000 shall be released back to Magnus by the Escrow Agent;

		

		(b)           US$200,000 is to be released by the Escrow Agent to First Fortune upon the following conditions being satisfied:

		

		
			(i)            all necessary government approvals have been received by Team 209 and Golden River for the transfer of 100% of the shares of Golden River to Magnus; and

				

				(ii)           all necessary government approvals have been received by Team 209 and Golden River for amendments to the JV Agreement, including, but not limited to, the following:

		

		

		

		

		
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					(A)          Section 5.3 of the JV Agreement is to be amended so that Golden River (Party B) has until December 31, 2005 to contribute the first US$200,000 to the registered capital of Western Mining (the co-operative company), until July 31, 2006 to contribute the next US$300,000, until December 31, 2007 to contribute the next US$1,000,000, and until December 31, 2009 to contribute the final US$1,510,000; and

					

					(B)           Section 3.5 shall be changed to "The legal address of the Cooperative Company shall be Dushimingyuan Bldg., No. A-2708, Central Renmin Road, Kunming City, Yunnan Province, 650031, People's Republic of China"; and

			

		

		

		(c)           US$100,000 is to be released by the Escrow Agent to First Fortune on or before, as mutually agreed by the parties, the day that is 12 months from the closing date of the Transaction, which closing date is to be a day on or before the third day after the conditions in (b)(i) and (b)(ii) have been satisfied (the "Closing Date").

		

		If the amount of funds to be released by the Escrow Agent as set forth in (a) above, which amount shall not exceed US$100,000, is required to be released by the Escrow Agent to Team 209 prior to the conditions set forth in (b)(i) and (b)(ii) above being satisfied, in order to prevent the JV Agreement from being terminated and/or the business license of Western Mining from being revoked, then the release of such funds, which shall not exceed US$100,000, by the Escrow Agent to Team 209 will be treated as a loan to First Fortune, which will bear interest at a rate of 4% per annum, calculated and paid semi-annually in arrears (the "Loan"). In addition, the Loan will be due on demand by Magnus.

		

		2.             Formal Agreement.     The terms, conditions and provisions governing the Transaction will be contained in a Formal Agreement, which will be prepared and executed in form and substance satisfactory to Magnus and First Fortune, and their respective legal counsel.

		

		3.             Representations and Warranties. The Formal Agreement shall contain usual and customary representations and warranties by each of Magnus and First Fortune, about each such corporation, including but not limited to:

		
			(i)            due incorporation and good standing;

				(ii)           authorized, issued and outstanding share capital and securities;

				(iii)          due authorization of the transactions and agreements relating thereto;

				(iv)          title of First Fortune to its assets;

				(v)           correctness of financial statements;

				(vi)          condition of properties, equipment and other material assets;

				(vii)         absence of undisclosed or contingent liabilities;

				(viii)        absence of any material adverse change since the date of its most recent financial

				               statements in the financial condition, results or prospects of such corporation;

				(ix)          compliance with applicable laws and securities filings, as applicable;

				(x)           absence of tax liabilities other than on a current basis;

				(xi)          absence of any threatened or pending litigation;

				(xii)         continuing validity of contracts, licenses and permits; and
(xiii)         that 100% of the shares of Golden River issued and outstanding are owned by First Fortune

				               and free and clear of any liens or encumbrances.

		

		

		4.             Indemnification.     Each of Magnus and First Fortune shall agree to indemnify the other against any loss, damage, expense, judgment or payment (including expenses of investigation, attorney's fees and litigation expenses) resulting from the inaccuracy of any representation or warranty made by such corporation in the Formal Agreement.

		

		5.             Representation on Golden River's and Western Mining's Board.     Concurrent with the completion of the Transaction on the Closing Date, the Board of Directors of both Golden River and Western Mining shall be reconstituted such that Magnus will have 100% representation on Golden River's Board of Directors and representation as stipulated under the JV Agreement on Western Mining's Board of Directors.

		

		6.             Confidentiality.     Each of Magnus and First Fortune agrees to treat all information (including but not limited to any information identified as "confidential" in writing and any such information which by its content or 

		

		

		

		
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			from the manner in which it is provided could reasonably be deemed to be confidential) concerning the other furnished, or to be furnished, by or on behalf of the other in accordance with the provisions of this paragraph (collectively, the "Information"), and to take, or abstain from taking, other actions set forth herein. The Information will be used solely for the purpose of evaluating the proposed Transaction, and will be kept confidential by each corporation and its officers, directors, employees, representatives, agents, and advisors; provided that (i) any of such Information may be disclosed by either corporation to its officers, directors, employees, representatives, agents, and advisors who need to know such information for the purpose of evaluating the proposed Transaction, (ii) any disclosure of such information may be made to which each corporation consents in writing, (iii) such information may be disclosed if so required by law, and (iv) such obligation of confidentiality shall expire upon such confidential information becoming public by means other than a breach of this paragraph. If the proposed Transaction is not consummated, each of Magnus and First Fortune will promptly return all documents, contracts, records, or properties to the other. The provisions of this paragraph shall survive the termination of this Letter Agreement.

		

		7.             Public Disclosure.     Neither party hereto will issue any public announcement or press release or otherwise make any public disclosure concerning the transactions contemplated herein without the prior approval of the other party hereto or except as may be required by law.

		

		8.             Reasonable Commercial Efforts.     Each of Magnus and First Fortune will negotiate in good faith and use its reasonable commercial efforts to arrive at a mutually acceptable Formal Agreement for approval, execution, and delivery on the earliest reasonably practicable date. Each party hereto will also use its reasonably commercial efforts (subject to all the terms and conditions hereof and the Formal Agreement) to effect the closing of the Transaction and to proceed with the transactions contemplated in this Letter Agreement and the Formal Agreement as promptly as is reasonably practicable.

		

		9.             Costs.     Magnus and First Fortune will each be solely responsible for and bear all of its own respective expenses, including, without limitation, expenses of legal counsel, accountants, financial and other advisors, incurred at any time in connection with pursuing or consummating the Formal Agreement and the transactions contemplated herein.

		

		10.           Execution in Counterparts.     This Letter Agreement may be executed in original or counterpart form, delivered by facsimile or otherwise, and when executed by the parties as aforesaid, shall be deemed to constitute one agreement and shall take effect as such.

		

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			11.           Governing Law.     The situs of this Letter Agreement is Vancouver, British Columbia, and for all purposes this Letter Agreement will be governed exclusively by and construed and enforced in accordance with the laws and Courts prevailing in the Province of British Columbia.

			

			

			Yours truly,

			

			MAGNUS INTERNATIONAL RESOURCES INC.

		

		

		Per: /s/ Graham Taylor                                                         

			             Graham Taylor, President

			

			

			If First Fortune wishes to accept the terms and conditions set forth above, please execute this Letter Agreement and return an originally executed as well as a facsimile copy to Magnus' legal counsel, Devlin Jensen at 2550 - 555 W. Hastings St., Vancouver, B.C., V6B 4N5, Attention: Michael Shannon; Facsimile: (604) 684-0916. Upon such execution and return, this Letter Agreement shall constitute a binding agreement upon the parties.

			

			

			Agreed and accepted this 25th day of July, 2005.

			

			FIRST FORTUNE INVESTMENTS INC.

				

				

			Per: /s/ Robert Atkinson                                                     

			             Robert Atkinson, President

		

		

		

			

			

			

			

			

			

			

			

			

			

			

			

			

			

			

			

			

			

			

			

			

			

			

			

		
		
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				EXHIBIT 10.2

				

				

				

				

				

				

			

			
					
							
								COOPERATIVE JOINT VENTURE CONTRACT

							

						

			

			
					
							
								between

							

						

			

			
					
							
								BRIGADE 209 OF THE

								NUCLEAR INDUSTRY OF YUNNAN PROVINCE, CHINA

							

						

			

			
					
							
								and

							

						

			

			
					
							
								GOLDEN RIVER RESOURCES CORP. Vancouver, British Columbia

							

						

			

			
					
							
								For the Establishment of

							

						

			

			
					
							
								(YUNNAN WESTERN MINING LTD.)

							

						

			

		

		

		

		

		

		

		

		

		

		

		

		

		
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			TABLE OF CONTENTS

			

		

		
			

				

				

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					Preliminary Statements .......................................................................................................................... 3

					Article 1: Parties to this Contract............................................................................................................ 4

					Article 2: Definitions .............................................................................................................................. 4

					Article 3: Establishment and Legal Form of the Cooperative Company.................................................... 8

					Article 4: Purpose, Scope of Business and Phases of Activity.................................................................. 9

					Article 5: Total Amount of Investment and Registered Capital; .............................................................. 10

					Assignment of Cooperative Company Interests .................................................................................... 10

					Article 6: Responsibilities of the Parties................................................................................................. 15

					Article 7: Mutual Representations ......... . ............................................................................................ 17

					Article 8: Warranties and Undertakings ................................................................................................ 18

					Article 9: Sale of Cooperative Company Products................................................................................ 18

					Article 10: Board of Directors ............................................................................................................. 19

					Article 11: Management Organization................................................................................................... 22

					Article 12: Conduct of Operations........................................................................................................ 22

					Article 13: Purchase and Supply of Materials, Equipment and Services ................................................. 24

					Article 14: Labour Management........................................................................................................... 24

					Article 15: Financial Affairs and Accounting; Distribution of Profits ....................................................... 25

					Article 16: Taxation and Insurance........................................................................................................ 27

					Article 17: Confidentiality .................................................................................................................... 28

					Article 18: Contract Tenn..................................................................................................................... 30

					Article 19: Termination and Liquidation................................................................................................. 30

					Article 20: Breach of Contract.............................................................................................................. 32

					Article 21: Non-Competition ............................................................................................................... 32

					Article 22: Force Majeure ................................................................................................................... 33

					Article 23: Settlement of Disputes......................................................................................................... 33

					Article 24: Applicable Law................................................................................................................... 34

					Article 25: Miscellaneous Provisions .................................................................................................... 35

		

		
			

			

				
						LIST OF APPENDICES

					

		

		
				
						Appendix 1: Sketch Map of "Cooperation Area"

					

		

		
				
						Appendix 2: Maps of Exploration Licenses 5300000310347 and 5300000310348

					

		

		
				
						Appendix 3: Mining Permits 5300009940016 and 5300000140012 and corner coordinates of Maiwoba /Guoyuan and Guang Lin Po "Operating Mines" respectively.

					

		

		

			

		

		
			COOPERATIVE JOINT VENTURE CONTRACT

		

		THIS CONTRACT is entered into on August 29, 2003 between Brigade 209 of the Nuclear Industry of Yunnan, Yunnan Province, China, (hereinafter referred to as "Party

		

		

		

		

		

			

			

			A") and Golden River Resources Corp. of Vancouver, British Columbia (hereinafter referred to as "Party B").

		
			Preliminary Statements

		

		Taking into consideration that:

			All mineral resources within the territory of the People's Republic of China (hereinafter referred to as "China") are owned by the State of the People's Republic of China.

				

			
	     (1)     Party B is willing to provide funds, to cooperate with Party A in carrying

				              out mineral resource exploration and both Party A and Party B are

				               willing to invest jointly, share the risk together and share exploration

				               results within a certain geographical area.

				     (2)     The Government of Yunnan Province of China (hereinafter referred to as

				               "Yunnan") is encouraging the establishment of cooperative enterprises in

				               Yunnan.

				

			
	In China the right of mineral exploration and mining is conferred through the issuance of permits, and the holder of an exploration permit or mining permit shall fulfill its business and obligations in accordance with the Mineral Resources Law of the People's Republic of China and other applicable laws and regulations.

				

			
	Party A has acquired the 209 Exploration Permits (both as defined in Article 2 of this Contract) and shall assist in the formation of a Sino-Foreign cooperative enterprise for further mineral exploration within the Cooperation Area (as defined in Article 2). If a mineral deposit of economic value is discovered through exploration, then the Cooperative enterprise shall apply to expand its scope of business to include mining and shall promptly apply for mining permits and develop and utilize the mineral deposit.
		

		

		Party A and Party B, after friendly consultation conducted in accordance with the principle of equality and mutual benefit, have agreed, in accordance with China's laws, regulations and relevant rules, to enter into this Contract which both Parties hereby shall abide by.

		

		

		

		

		

		

		

		

		

		

		

		

		

		

		

		
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			Article 1: Parties to this Contract

		

		1.1              The Parties to this Contract are:

		
			
				Party A: Brigade 209 of the Nuclear Industry of Yunnan Province, China a registered institutional legal person with its legal address at No. 182, West Donfeng Road, Kunming City, Yunnan Province, People's Republic of China.

					

				

				
					Legal Representative Person o£ Party A:

						

						Name:              Mr. Cheng Hui Ming Position:         Director

						Nationality:        Chinese

						Resident of:       China

						

					

				

				(2)        Party B: Golden River Resources Corp., a company duly registered under the laws of British Columbia with its legal address at Suite 1450, 789 West Ponder Street, Vancouver, British Columbia, Canada.

					

				

				
					Legal Representative Person of Party B

						

						Name:              Jason Birmingham

						Position:             President 

						Nationality:                         Canadian

						Resident of:       Canada

				

			

		

		1.2               Change of Legal Representative Person

		
			
				Each Party shall have the right to change its legal representative person and if a change occurs such Party is obligated to notify the other Parry by written notification of the name, position, nationality and limits of rights of its new legal or authorized representative. One Party shall reimburse the other Party for direct losses the other Party incurs as a result of one Party not notifying the other Party in a timely manner of a change of its legal representative person.

			

		

		
			

				Article 2: Definitions

		

		                   Unless otherwise provided herein, the following words and terms used in this Contract shall have the meanings set forth below:

		2.1              "209 Exploration Permits" means Exploration Permit Nos. 5300000310347 and 5300000310348 both issued on 2003.05.07 concerning an area within the Zhefang Area, Luxi City, Dehong Prefecture, Yunnan Province, held by Party A as of the

			

			

			

			

		

		
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		date of execution of this Contract and all other exploration permits issued to Party A which cover areas within the Cooperation Area as shown in Appendix 1.
		2.2              "Affiliate" means, in relation to Party A, any superior enterprise or department of Party A and any enterprise or other entity which is directly or indirectly subordinate to, or controlled by, Party A or the department-in-charge of Party A; stock the term "control" meaning ownership of fifty percent or more of the registered capital or voting, or the power to appoint the general manager, factory chief or other principal person in charge of an enterprise or other entity.

		2.3              "Affiliate" means, in relation to Party B, any company which, directly or indirectly, is controlled by, under common control with, or in control of, Party B; the term "control'' meaning ownership of fifty percent or more of the voting stock or registered capital, or the power to appoint or elect a majority of the directors, or the power to direct the management, of a company.

		2.4              "Articles of Association" means the Articles of Association of the Cooperative Company signed by Party A and Parry B and approved by the Examination and Approval Authority simultaneously with this Contract.

		2.5              "Board of Directors" means the board of directors of the Cooperative Company.

		2.6              "Budget" means a detailed estimate and schedule of all costs to be incurred pursuant to a Program to be implemented by the Cooperative Company approved by the Board of Directors in accordance with Article 12.3.

		2.7              "Budget Period" means one year unless otherwise determined by the Board of Directors.

		2.8              "Business Day" means a day other than Saturday, Sunday or statutory holiday in China or Canada.

		2.9              "Business License" means the business license of the Cooperative Company issued by the China State Administration for Industry and Commerce or its authorized local administration for industry and commerce.

		2.10            "Contract Term" means the term of this Contract as set forth in Article 18.

		2.11            "Cooperation Area" means that distinct area of 147.09 square kilometers which is within the following set of coordinates set out and marked for ease of reference on the map included as Appendix 1, or other area as the Parties mutually agree upon.

		2.12            "Cooperation Area Licenses" means the 209 Exploration Permits and all other Exploration Permits acquired by Party A within the Cooperation Area prior to the issuance of the Business License, including the Exploration Permits to be issued to Party A as a result of its application on 2003.05.07 for a permit covering a 147.09 square kilometer area within the Cooperation Area.

		

		2.13            "Cooperative Company" means the Sino-Foreign enterprise registered and formed by Party A and Patty B pursuant to this Contract and in accordance with the Law of 

		

		

		

		
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		the People's Republic of China on Sino-Foreign Cooperative Enterprises and other relevant laws of China.
		2.14            "Costs" means all costs, expenses, charges and outlays, direct and indirect, made or incurred by or on behalf of the Cooperative Company or General Manager in respect of operations of the Cooperative Company from the date of execution of this Contract including, without limiting the generality of the foregoing, all field office costs, costs of Exploration, permitting, Development and Mining, which costs shall include the salaries, benefits and travel expenses or persons engaged in operations of the Cooperative Company.

		2.15            "Development" means all preparation for the removal from the ground and recovery of Products, including the preparation of feasibility studies, engineering, permitting, construction, installation or purchase of plant and infrastructure, leach pads, a mill or processing plant or any other facilities to be used for the mining, transporting, handling, milling, processing or other beneficiation of Products.

		2.16            "Effective Date" means the effective date of this Contract, which shall be the date on which this Contract and the Articles of Association have been approved by the Examination and Approval Authority.

		2.17            "Examination and Approval Authority" means the government department or agency authorized under the China State Council rules regarding the examination and approval of foreign investment projects to examine and approve this Contract and the Articles of Association.

		2.18            "Exploration" means all activities directed toward ascertaining the existence, location, quantity, quality or commercial value of deposits of Minerals, including prospecting, trenching, drilling, sampling, surveying, metallurgical testing, economic pre-feasibility studies, environmental impact studies, researching and perfecting titles to use land and Exploration Permits

		2.19            "Exploration Permits" means all rights to conduct Exploration for Minerals within the Cooperation Area and other such rights granted by the Permit Issuing Authority.

		2.20            "Formal Approvals" means the fulfillment of the conditions listed in Article 5.5(1) to (4).

			

			2.21            "Management Personnel" means the Cooperative Company's General Manager, Deputy General Manager and other management personnel who report directly to the General Manager.

		2.22            "Minerals" means all metals and minerals, including gold.

		

		

		

		

		
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		2.23            "Mineral Data" means all geological, geochemical and geophysical data and prospecting data, survey results, drill logs, assays and other similar data, and includes access to drill core samples.
		2.24             "Mining" means all activities to recover Products, including the mining, extracting, producing, handling, treating, heap leaching, beneficiation or other processing of Minerals including the production of refinable concentrates, regardless of the method, and all operating and reclamation activities except the extraction of materials for testing purposes.

		2.25            "Mining Licenses" means all rights to conduct Mining for Minerals within the Cooperation Area granted by the Permit Issuing Authority.

		2.26            "Other Entity" means any natural person, legal person or other organization, enterprise or entity other than Party A or Party B.

		2.27            "Participation Ratio" of each Party means, its share in distributions of profits and its share in the distribution of proceeds of liquidation in accordance with Article 15.11 and Article 19.5, respectively. The Participation Ratio and interest in the registered capital of the Cooperative Company of Party A and of Party B shall be determined in accordance with the provisions of Article 5.4(2) and Article 5.6(5)

		2.28            "Permit Issuing Authority" means the Ministry of Land and Resources of China or the Departments of Land and Resources of various provinces, autonomous districts, district governments and municipalities directly under the Central Government.       '

		2.29            "Phase 1 " and "Phase 2", mean the first and second phase, respectively, of the activities of the Cooperative Company as more particularly described in Article 4.3.

		2.30            "Phase 1 Feasibility Study Report" means the feasibility study report compiled by Patty A on behalf of both Parties in accordance with the relevant laws and regulations in China relating to the formation of a Cooperative Company, which report must be approved by the appropriate department or authority in charge.

		2.31            "Products" means all Minerals produced from Mining Licenses or other rights owned by the Cooperative Company, including all gold dore concentrate, and other products produced therefrom.

		

		

		

		

		

		

		

		

		

		
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		2.32            "Program" means a reasonably detailed description of operations to he conducted and objectives to be accomplished by the Cooperative Company for a Budget Period, approved by the Board of Directors in accordance with Article 12.3.
		2.33            "Three Funds" means the social insurance, medical insurance and housing fund as required to be established in accordance with applicable laws in China.

		
			

				Article 3: Establishment and Legal Form of the Cooperative Company

		

		3.1              The Parties hereby agree to establish the Cooperative Company in accordance with the relevant laws and regulations of China and the provisions of this Contract. Promptly following the signature of this Contract, both Parties shall sign the Cooperative Company's Articles of Association. Party A will handle application procedures for the approval of this Contract and the Articles of Association, the procedures for enterprise name pre-registration, and the procedures for enterprise registration. Party B will cooperate with Party A in providing documents and information required from Party B in connection therewith

		3.2              Party A shall provide to Party B photocopies of all application documents and materials submitted to government departments in connection with the applications and procedures described in Article 3.1, and promptly upon receipt shall provide to Party B photocopies of all correspondence, official replies, approval certificates, the Business License and any other documents received from government departments. In addition, Party A shall provide to Party B, within sixty (6Q) days from issuance of the Business License, notarized copies of the Business License and of the official replies and approval certificates for the Phase 1 Feasibility Study Report, this Contract and the Articles of Association.

		3.3              The Cooperative Company shall commence operations upon the issuance of its Business License.

		3.4              The name of the Cooperative Company shall be "Yunnan Western Mining Ltd." in English.

		3.5              The legal address of the Cooperative Company shall be No. 182, West Dongfeng Road, Kunming City, Yunnan Province, People's Republic of China.

		3.6              The Cooperative Company may establish branch offices with the consent of the Board of Directors and approval from the relevant governmental authorities in China.

		3.7              The Cooperative Company shall be an enterprise legal person registered and formed by Party A and Party B pursuant to this Contract and in accordance with the laws of China. The activities of the Cooperative Company shall comply with the provisions of the laws, decrees and regulations of China, and its lawful rights and interests shall be protected by the laws of China.

		

		

		

		

		
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		3.8              The Cooperative Company shall be a limited liability company. The liability of each Party to the Cooperative Company shall be limited to its contribution to the Cooperative Company's registered capital in accordance with Article 5, which provides that Party A shall, as its cooperative condition, transfer the Cooperation Area Licenses to the Cooperative Company and Party B's contribution to the registered capital of the Cooperative Company shall be Three Million and Ten Thousand US Dollars (US$3,010,000), which for all intents and purposes will be used for the exploration and development of the Exploration Licenses and for the ongoing operations of the Cooperative Company during Phase l. Creditors of the Cooperative Company shall have recourse only to the assets of the Cooperative Company and shall not be entitled to compensation, damages or other remedies from any of the Parties.
		
			

				Article 4: Purpose, Scope of Business and Phases of Activity

		

		4.1              The purpose of the Cooperative Company is to use advanced technology and scientific management techniques to conduct Exploration activities in China, and to obtain satisfactory economic benefits for the Parties.

		4.2              The Cooperative Company's scope of business shall be to conduct Exploration    for mineral deposits of all precious metals and non-ferrous metals.

		4.3              The activities of the Cooperative Company shall be divided into two phases as follows:

		
			
				(1)        Phase 1: Within the schedule described in Article 5.3(2), Party A shall transfer, as its cooperative condition, the Cooperation Area Licenses to the Cooperative Company, accounting for a ten percent (10%) equity interest in the registered capital of the Cooperative Company, while Party B shall contribute Three Million and Ten Thousand US Dollars (US$3,010,000) to the registered capital of the Cooperative Company, accounting for a ninety percent (90%) equity interest in the registered capital and Participation Ratio of the Cooperative Company.

					

					(2)        Phase 3: After the completion of Phase 2, any increase in the registered capital of or total investment of the Cooperative Company shall be contributed One Hundred Percent (100%) by Party B, and Party A shall not be required to make any further contribution to the Cooperative Company to retain its ten percent (10%) of the registered capital and Participation Ratio of the Cooperative Company.

					

				

			

		

		4.4              The Parties confirm that their objective is for the Cooperative Company's scope of business to include the right to conduct Exploration for deposits of precious metals and non-ferrous metals as contemplated in Article 4.2. The Parties shall cooperate with one another and with the Cooperative Company to obtain any additional regulatory approvals and registrations that are required by applicable laws and regulations of China 

		

		

		

		

		

		
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		in order that the restricted nature of the Cooperative Company's scope of business is expanded to permit the Cooperative Company to also undertake Development and Mining of all Minerals including, if applicable, approvals from appropriate State authorities of China.
		
			

				Article 5: Total Amount of Investment and Registered Capital;

					 Assignment of Cooperative Company Interests

		

		5.1              The Cooperative Company's total investment shall be Three Million and Ten Thousand US Dollars (US$3,010,000) and the Cooperative Company's registered capital shall be Three Million and Ten Thousand US Dollars (US$3,010,000).

		5.2

		
			
				(1)        Party A shall, as its cooperative condition, transfer to the Cooperative Company the Cooperation Area Licenses and Party A shall have a ten percent (10%) share of the Cooperative Company's registered capital.

					

					(2)        The contribution to the registered capital of the Cooperative Company by Party B is Three Million and Ten Thousand US Dollars (US$3,010,000), representing a ninety percent (90%) share of the Cooperative Company's registered capital. Party B shall make its contribution to the registered capital in United States Dollars cash.

			

		

		5.3

		
			
				(1)        Subject to the provisions of Article 5.5, the Parties shall make their contribution to registered capital in accordance with the timetable set forth in Article 5.3(2) . If the overdue contribution has not been made within thirty (30) days of notification of default, the other Party shall have the right to terminate this Contract and claim damages from the breaching Party.

					

					(2)       The timetable for capital contributions is as follows:

					

				

				
					(i)         Party A shall, as its cooperative condition pursuant to Article 5.2, transfer to the Cooperative Company the Cooperation Area Licenses. Party A shall apply to transfer the Cooperation Area Licenses to the Cooperative Company within fifteen (15) days of the issuance of the Business License; and

						

						(ii)        Party B will contribute a minimum of Five Hundred Thousand US Dollars (US$500,000) to the registered capital of the Cooperative Company within 12 months of the issuance of the Business License, the first Two Hundred Thousand US Dollars (US$200,000) to be contributed 15 days upon issuance of the Business License. Party B will earn its interest in the Cooperative Company as follows:

						

					

					
						(A)       Upon contribution of a cumulative total of One Million US Dollars (US$1,000,000) to the registered capital of the 

					

				

			

		

		

		

		

		

		
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						Cooperative Company, Party B will have earned and owned a 30% interest in the Cooperative Company.

							

							(B)       For each additional One Million US Dollars (US$1,000,000) contributed by Party B to the registered. capital of the Cooperative Company, Party B shall earn and own a further 30% interest in the Cooperative Company to a maximum of 90% upon contribution of a cumulative total of Three Million and Ten Thousand US Dollars (US$3,010,000) to the registered capital of the Cooperative Company.

							

						

					

				

				(3)        Notwithstanding Article 5.3(2)(ii), Party B may, at its sole discretion, elect to make contributions to the capital of the Cooperative Company in advance of the dates specified in Article 5.3(2)(ii), provided that during Phase 1, Party B shall contribute sufficient funds on an annual basis to the Cooperative Company to permit it to undertake the minimum exploration expenditures on the Cooperative Area Licenses as required by law.

			

		

		5.4

			

		

		
			
				 (1)        Each time Party B makes a contribution to the Cooperative Company's registered capital, a Chinese registered accountant engaged by the Board of Directors shall promptly verify the contribution and issue a capital verification report to the Cooperative Company within sixty (60) days from the date of the contribution. Within thirty (30) days from receipt of the capital verification report, the Cooperative Company shall issue an investment certificate to such Party in the form prescribed by the applicable regulations in China, signed by the Chairman and the Vice­Chairman of the Board and sealed with the Cooperative Company's seal, and a copy shall be submitted to the Examination and Approval Authority for the record. The General Manager shall maintain a file of all capital verification reports and copies of all investment certificates that have been issued to the Parties.

					

					(2)        The Parties interests in the registered capital of the Cooperative Company and heir respective Participation Ratios shall be adjusted each time a  Party makes a contribution to the registered capital, in accordance with the following formula:

					

				

			

			BI = (C x 90%)/ US$3,010,000

				AI = 100% - BI

				

				Where:

				

				BI = Party B's Participation Ratio and percentage interest in the registered capital C = dollar value of all contributions to the registered capital by Party B

				Al = Party A's Participation Ratio and percentage interest in the registered capital

		

		

		5.5            Party B shall not be obligated to make any contribution to the Cooperative Company's registered capital pursuant to Article 5.3(2)(ii) or Article 5.6(3) if any of the following conditions has not been satisfied or waived in writing by Party B:

		

		

		

		

		

		
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				(1)        following signature by both Parties, this Contract and the Articles of Association have been approved by the Examination and Approval Authority without altering their terms and conditions and without imposing any additional obligations on either Party or the Cooperative Company, unless Party B has been notified in advance of and consented in writing to such alterations or additional obligations;

					

					(2)        the Business License has been issued without altering the Cooperative Company's business scope as set forth in Article 4.2, unless Party B has been notified in advance of and consented in writing to such alteration;

					

					(3)        issuance or transfer to the Cooperative Company in its name of the Cooperation Area Licenses, free and clear of all liens and liabilities;

					

					(4)        issuance or transfer to the Cooperative Company of all other regulatory approvals, registrations, permits, licenses, certificates and rights that Party B reasonably considers to be necessary for the Cooperative Company to be able to conduct the various activities within its scope of business; and

					

					(5)         receipt by Party B of a legal opinion from a lawyer of Party B's choice that confirms that the conditions listed above in Article 5.5(1) to (4) have been satisfied and that this Contract is a valid and binding contract that is fully enforceable against the Parties in accordance with its terms.

					

					The Parties agree that if any of the conditions specified in Article 5.5(l) to (5) have not been satisfied or waived by Party B within the first to occur of (A) three (3) months from issuance of the Business License or (B) five (5) months from the date on which this Contract is signed by the Parties, or within any extended period of time as the Parties may agree in writing, then Party B shall have the right to terminate this Contract by written notice to Party A.

			

		

		

		5.6              The stipulations set forth in this Article 5.6 shall apply to transfers of the Parties' interests in the Cooperative Company:

		
			
				(1)        Each Party shall have a pre-emptive right of purchase with respect to the transfer of all or any part of the other Party's interest in the Cooperative Company. A Party (the "Transferor") that wishes to transfer its interest in the Cooperative Company shall give the other Party written notice (the "Transfer Notice") setting forth the identity of the intended transferee (the "Intended Transferee") and the price and other terms and conditions of the transfer. The Transfer Notice shall constitute an irrevocable offer to transfer the interest to the other Party or, in the case of Party B, to Party B or such Other Entity as may be designated by Party B, at the price and upon the other terms and conditions set forth therein. The other Party may accept the Transferor's offer to transfer the interest by written notice (the "Acceptance Notice") to the Transferor sent no later than sixty (60) days after receipt of the Transfer Notice. During that 

			

		

		

		

		

		

		

		
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				sixty-day period, the Transferor shall promptly provide to the other Party such information concerning the Intended Transferee's business and financial condition as the other Party may reasonably request so as to enable the other Party to decide whether to exercise its preemptive right of purchase. If the other Party does not send the Acceptance Notice within the sixty-day period, the Transferor may transfer. the interest to the Intended Transferee for a price no less than the price set forth in the Transfer Notice and upon other terms and conditions no more favourable to the Intended Transferee than those set forth in the Transfer Notice. The Transferor shall notify the other Parry in writing of the final terms and conditions of the transfer within two (2) days of concluding a transfer contract with the Intended Transferee. If the transfer to the Intended Transferee is not submitted to the Examination and Approval Authority for approval within three (3) months from the expiration of the foregoing sixty (60) day period, the Transferor must again comply with the provisions of this Article 5.7(1) before transferring its interest in the Cooperative Company.

					

					(2)        Each Party may at any time during the Contract Term transfer its interest in the Cooperative Company to an Affiliate of the Party. Each Party hereby waives its pre-emptive right of purchase with respect to such transfers by the other Party.

					

					(3)        A Party transferring its interest in the Cooperative Company will:

					

				

				
					(i)         ensure that its transferee signs a legally binding document making it a party to this Contract and bound by the terns and conditions of this Contract to the same extent as was the transferring Party; and

						

						(ii)        remain liable for any of its liabilities or obligations existing or incurred hereunder prior to the date of transfer of its interest.

						

					

				

				(4)        Each Party hereby consents to any transfer that meets the requirements of this Article 5.6 and further agrees that the Board of Directors shall be deemed to have consented unanimously to such a transfer. Each Party agrees promptly to take all actions and to sign all documents, and to cause its appointees on the Board of Directors promptly to take all actions and sign all documents that are legally required to effect the transfer. The transfer shall be submitted to the Examination and Approval Authority for approval and, following receipt of such approval, the Cooperative Company shall carry out procedures for the amendment of registration with the competent administration for industry and commerce.

			

		

		5.7              Any transfer of the Cooperation Area Licenses to an Other Entity requires approval by Party A and Party B.

		5.8              The Cooperative Company may obtain loans in China or abroad to fund the difference between the total amount of investment and the registered capital. Parry A will assist the Cooperative Company in applying for loans from lenders in China on competitive terms and conditions, and Party B will assist the Cooperative Company in applying for loans from lenders outside China on competitive terms and conditions. If any lender requires a 

		

		

		

		

		

		
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		loan guarantee, the Parties shall consult to determine whether and on what terms they are willing to provide such guarantees.
		5.9              No Party shall mortgage, pledge or otherwise encumber its interest in the Cooperative Company without the prior written consent of the other Party.

		5.10            Except as otherwise expressly provided in this Contract, the Cooperative Company shall not assume any liabilities or other obligations of Party A or Party B.

		5.11            Regarding the current mining operations in the Cooperation Area, both parties agree that:

		
			
				(1)        The current mining operations at Maiwoba and Guoyuan (the "Operating Mines") will be allowed to continue at their present stage.

					

					(2)        The mining operations shall be restricted to surface ores in the designated mining area (the "Designated Area") whose boundaries are specified in the registered mining permits issued to Party A as more particularly described in Appendix 3

					

					(3)        Party A will remain as the sole owner and operator of the Operating Mines. Party A will be solely responsible for all the liabilities and obligations that may arise from the Operating Mines. Party A will further indemnify Party B and the Cooperative Company for any and all losses, costs, taxes, expenses, governmental fees, environmental reclamation, regulatory payments, liabilities and compensations that arise out of or are related to the activities of the Operating Mines.

					

					(4)        Should the Cooperative Company request the interruption of one or all of the Operating Mines in order for the Cooperative Company to carry out exploration activities in the Designated Area, the Cooperative Company will compensate the Operating Mines for reasonable losses or expenses incurred as a result of such interruption, excluding any losses of profits. The Operating Mines will provide the Cooperative Company an estimate of the expected losses and expenses from such interruption.

			

		

		
			

				Article 6: Responsibilities of the Parties

		

		6.1              In addition to its other obligations under this Contract, Party A shall have the following responsibilities:

		

		

		

		

		

		
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				(1)        procure on the Cooperative Company's behalf and at the expense of the Cooperative Company all approvals, permits, licenses, certificates and rights needed for the lawful establishment of the Cooperative Company and for the Cooperative Company to undertake activities within the scope of business set out in Article 4.2 during the term of the Cooperative Company;

					

					(2)        assist the Cooperative Company in negotiations with county, municipal, provincial and central government departments and other relevant authorities to ensure that the Cooperative Company can commence activities within the scope of business set out in Article 4.2 in accordance with applicable regulations, and to maintain all the legal rights and interests of Party B under this Contract;

					

					(3)        at the request of the Cooperative Company, provide at rates competitive in the vicinity, all office space required for the operations of the Cooperative Company and any labor and staff requested by the Cooperative Company;

					

					(4)        assist the Cooperative Company in applying for all licenses and permits required for the operation of the Cooperative Company's business, including renewals of or replacements for the Cooperation Area Licenses.

					

					(5)        assist the Cooperative Company in purchasing, leasing or otherwise procuring equipment and machinery, tools, raw materials, office furniture and equipment, vehicles and other materials required for the Cooperative Cornpanys production and operations from sources in China;

					

					(6)        assist the Cooperative Company in applying for licenses for the import of equipment and machinery, tools, raw materials, office furniture and equipment, vehicles and other materials required for the Cooperative Company's production and operations, and in carrying out all import and customs formalities in respect thereto;

					

					(7)        assist the Cooperative Company in obtaining all necessary entry visas, work permits, residence pen-nits and other necessary documents for its expatriate personnel;

					

					(8)        assist the Cooperative Company in recruiting skilled managers and technical personnel;

					

					(9)        assist the Cooperative Company in obtaining or providing housing for its expatriate personnel, with the cost of such housing to be borne by the Cooperative Company;

					

					(10)      assist the Cooperative Company to obtain government approvals and registrations necessary to effect any increase in registered capital that, as contemplated in accordance with the provisions of Article 5.6, are required under a Budget approved by the Board of Directors;

			

		

		

		

		

		

		

		
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				(11)      assist the Cooperative Company in applying for and obtaining the most preferential tax treatment and other investment incentives available under the laws and regulations of China and of Yunnan;

					

					(12)      assist the Cooperative Company in obtaining and maintaining a Foreign Exchange Registration Certificate and other necessary approvals to utilize the various foreign exchange balancing methods permitted under the applicable laws and regulations of China;

					

					(13)      assist the Cooperative Company in opening Renminbi and foreign currency bank accounts and in obtaining from local banks all necessary working capital Remninbi loans; and

					

					(14)      handle other matters entrusted to it by the Board of Directors.

			

		

		

		6.2              In addition to its other obligations under this Contract, Party B shall have the following responsibilities:

		

		
			
				(1)        assist the Cooperative Company in purchasing, leasing or otherwise procuring equipment and machinery, tools, raw materials, office furniture and equipment, vehicles and other materials required for the Cooperative Company's production and operation from sources outside of China;

					

					(2)        assist the Cooperative Company in recruiting skilled managers and technical personnel; and

					

					(3)        handle other matters entrusted to it by the Board of Directors. Article 7: Mutual Representations

			

		

		
			

				Article 7: Mutual Representations

		

		7.1              Each Party hereby represents and warrants to the other Party that, as of the date hereof and as of the Effective Date:

		
			
				(1)        such Party is duly organized, validly existing and in good standing under the laws of the place of its establishment or incorporation;

					

					(2)        such Party has carried out all procedures and obtained all approvals required under the laws and regulations to which it is subject, and has the requisite power under such laws and regulations, to enter into this Contract and to perform all of its obligations hereunder-,

					

					(3)        such Party has taken all internal actions necessary to authorize it to enter into and perform this Contract and its representative whose signature is affixed hereto is fully authorized to sign this Contract and to bind such Party thereby;

					

					(4)        upon the Effective Date, this Contract shall be legally binding on such Party;

			

		

		

		

		

		

		

		
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				(5)        neither the signature of this Contract nor the performance of its obligations hereunder will conflict with, or result in a breach of, or constitute a default under, any provision of the articles of association or by-laws of such Parry, or any law, regulation, rule, authorization or approval of any government agency or body, or of any contract or agreement, to which such Party is a party or subject;

					

					(6)        no lawsuit, arbitration, other legal or administrative proceeding, or governmental investigation is pending against such Party that would affect in any way its ability to enter into or perform this Contract; and

					

					(7)        such Party has disclosed all information in its possession relating to the Cooperative Company's establishment or future operations which may have a material adverse effect on such Party's ability to fully perform its obligations hereunder, or which if disclosed to the other Party, would have a material effect on the other Party's willingness to enter into this Contract, and none of the information provided by such Party to the other Party contains any material statements which are false or misleading.

			

		

		

		
			

				Article 8: Warranties and Undertakings

		

		8.1              Party A represents, warrants and undertakes to Party B that:

		
			
				(1)        it has lawfully acquired the Cooperation Area Licenses and that Appendix 1 and Appendix 2 contain a complete and correct description of the Cooperation Area Licenses as of the Effective Date;

					

					(2)        it has not committed, and will not commit, any breach under the Cooperation Area Licenses and enjoys valid and subsisting mining and/or exploration rights to the areas described in each permit comprising the Cooperation Area Licenses;

					

					(3)        it may lawfully transfer to the Cooperative Company all of the Cooperation Area Licenses;

					

					(4)        the Cooperation Area Licenses are not subject to any mortgage, encumbrances, liens or other charges and Party A has good marketable title to the Cooperation Area Licenses;

					

					(5)        it knows of no actual legal claim by any government department, military unit, organization, company, collective or any other entity or individual that will directly or indirectly subject the Cooperative Company's use rights to any conditions except those specified in the Cooperation Area Licenses; and

					

					(6)        all necessary filings have been made and other requirements to maintain the Cooperation Area Licenses have been fulfilled.

			

		

		8.2              Each Parry shall indemnify the other Party against all losses, expenses and liabilities arising from a breach of any of the foregoing representations, warranties and undertakings.

		

		

		

		

		

		
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			Article 9: Sale of Cooperative Company Products

		

		9.1              If the Cooperative Company's scope of business is expanded to include Exploration, Development and Mining of Minerals, the Cooperative Company may sell Minerals and related Products extracted from the Cooperation Area in accordance with the relevant laws and regulations of China.

		9.2              The pricing of Minerals and related Products sold by the Cooperative Company shall be determined by the General Manager in accordance with the relevant laws and regulations of China and pricing policies set by the Board of Directors.

		

			Article 10: Board of Directors

		10.1                        The Board of Directors shall be the  highest authority of the Cooperative Company and shall decide all matters of major importance to the Cooperative Company.  The date of issuance of the Business License shall be the date of establishment of the Board of Directors.

		10.2                        The Board of directors shall comprise five (5) directors, two (2) of whom shall be appointed by Party A and three (3) of whom shall be appointed by   Party B.  If  Party A’s interest in the registered capital is ten (10%) percent then the directors appointed by Party A must be acceptable to Party B.

		10.3                        Each Director shall be appointed for a term of three (3) years, provided that the Party which has appointed a director may at any time remove that director and appoint a replacement in the same manner as the original appointee.  A director may serve consecutive terms if reappointed by the Party that originally appointed him.  If a seat on the Board of Directors is vacated by the retirement, resignation, removal, disability or death of a director, the Party that originally appointed such director shall appoint a successor to serve out such term.

		10.4                        Party B shall designate a director to serve as the Chairman of the Board and Party A shall designate another director to serve as the Vice Chairman of the Board.  The 

		

		

		

		

		

		
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		Chairman of the Board is the legal representative person of the Cooperative Company, but shall not contractually or otherwise bind the Cooperative Company without prior written authorization of the Board of Directors. Whenever the Chairman of the Board is unable to perform his responsibilities for any reason, the Chairman shall appoint the Vice-Chairman of the Board to perform such responsibilities or if the Vice-Chairman is unable to perform such responsibilities for any reason, the Chairman shall appoint another Director to perform such responsibilities.
		10.5                        To appoint or remove a director, or to designate or change the Chairman or Vice-Chairman, a Party shall notify the other Party in writing.  Appointments and removals of directors, designations and changes of the Chairman or Vice-Chairman, shall become effective upon receipt of such notice by the other party.  Appointments, removals, designations and changes in designation shall be filed with the Examination and Approval Authority and registered with the competent administration for industry and commerce to the extent required by law.

		10.6            The Cooperative Company shall indemnify each director against all claims and liabilities incurred by reason of his being a director of the Cooperative Company, provided that the claim or liability does not result from intentional misconduct or gross negligence or a violation of criminal laws by the director.

		10.7            The first meeting of the Board of Directors shall be held within one (1) month from the date of issuance of the Business License, unless the Parties agree otherwise. Thereafter, the Board of Directors shall hold at least one (1) regular meeting in each calendar year. Upon the written request of two (2) or more of the directors of the Cooperative Company specifying the matters to be discussed, the Chairman of the Board shall within thirty (30) days of receipt thereof convene an interim meeting of the Board of Directors.

		10.8            The Chairman of the Board shall give written notice, including the time and place of the meeting and the agenda, to each of the directors at least fifteen (15) days prior to any meeting of the Board. A Board meeting held without proper notice having been given to any director shall be invalid unless such director, either before or after the meeting, delivers a written waiver of notice to the Chairman and Vice-Chairman. Meetings shall be held at the registered address of the Cooperative Company or such other address in China or abroad as may be agreed by the Chairman of the Board and Vice-Chairman of the Board. The Chairman of the Board shall set the agenda for Board meetings after consultation with the Vice-Chairman of the Board and shall be responsible for convening and presiding over such meetings.

		

		

		

		

		

		
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		10.9            Four (4) directors, two (2) of whom must be the Chairman and the Vice ­Chairman, present in person or by proxy shall constitute a quorum for all meetings of the Board of Directors. If at any properly convened meeting, no quorum is constituted because less than four (4) directors are present in person or by proxy, then the Chairman of the Board may call another meeting with five (5) days' notice to each director. If a director or his proxy fails to attend that other meeting, that director shall be deemed to have attended such meeting for the purposes of quorum.
		10.10          If a director is unable to attend Board of Directors meetings or to carry out his other functions as director, he may issue a proxy and entrust a representative to attend meetings or carry out his other functions on his behalf. The representative so entrusted shall have the same rights and powers as the director who entrusted hum. One person may represent more than one director by proxy.

		10.11         The Board of Directors will cause complete and accurate minutes in both Chinese and English to be kept of all Board meetings. Whenever possible, the text of Board resolutions shall be prepared in Chinese and English for signature at the meeting by those directors voting in favor of the resolution. Draft minutes of Board meetings shall be distributed to all the directors within thirty (30) days from the date of the meeting. Any director who wishes to propose an amendment or addition shall submit the same in writing to the Chairman and the Vice­Chairman within thirty (30) days after receipt o£ the draft minutes. No amendments or additions shall be proposed to written resolutions signed at a meeting. The Chairman and Vice-Chairman shall complete the final minutes and distribute them to each director and each Party not later than ninety (90) days after the meeting. If the Chairman and Vice-Chairman cannot agree on any part of the text of the minutes, the text at issue shall be placed on the agenda of the next Board meeting and they shall complete, sign and distribute the rest of the final minutes as stipulated above. The Cooperative Company shall maintain a file of all Board meeting minutes and make the same freely available to the Parties and their authorized representatives.

		10.12          The adoption of resolutions concerning the following matters shall require the unanimous assent of all the directors who are present in person or by proxy at a duly convened meeting of the Board of Directors:

		
			
				(1)        amendments to the Articles of Association of the Cooperative Company;

					

					(2)        increase or reduction in the registered capital of the Cooperative Company;

					

					(3)        dissolution of the Cooperative Company;

					

					(4)        mortgage or pledge of assets of the Cooperative Company;

					

					(5)        borrow funds or enter into any loan or guarantee agreements other than for the purposes of Development and Mining within the Cooperation Area, if such activities are permitted by the Cooperative Company's scope of business; and

			

		

		

		

		

		

		

		
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				(b)        merger, division or change in the form of organization of the Cooperative Company.

			

		

		10.13          The adoption of all other resolutions shall require the assent of a majority of the directors who are present in person or by proxy at a duly convened meeting of the Board of Directors.

		10.14          The Board of Directors may adopt any resolution without a meeting if all of the directors then holding office sign the resolution in written form. Such written resolutions shall be filed with the minutes of Board meetings and shall have the same force and effect as a unanimous resolution adopted at a meeting of the Board.

		10.15          Directors shall serve without any remuneration. Costs and expenses incurred by a director in the performance of his duties as director shall be paid for by the Party appointing such director, but the costs of directors attending regular meetings of the Board of Directors (including but not limited to travel expenses) shall be reimbursed by the Cooperative Company.

			

			

		

		
			Article 11: Management Organization

		

		11.1            The Cooperative Company's management organization shall be under the leadership of a General Manager, who shall report directly to the Board of Directors. In addition to the General Manager, the Cooperative Company shall have a Deputy General Manager, and other department managers, each of whom shall report directly to the General Manager.

		11.2            The General Manager shall be nominated by Party B, the Deputy General Manager shall be nominated by Party A, and each of them shall be subject to appointment by the Board of Directors. The other Management Personnel, if any, shall also be appointed by the Board of Directors. All replacements for any of the Management Personnel, whether by reason of the retirement, resignation, disability or death of a manager or of the removal of a manager by the Board of Directors or by the Party which nominated hirn, shall be nominated and subject to appointment in the same manner as the original appointee, unless otherwise specified in this Contract.

		11.3            The General Manager shall be in charge of the day-to-day operation and management of the Cooperative Company and shall carry out all matters entrusted by the Board of Directors. The Deputy General Manager shall assist the General Manager in his work and shall report to the General Manager.

		11.4            It is not necessary that the General Manager, Deputy General Manager and all other Management Personnel shall perform their duties on a full-time basis and they shall be allowed to concurrently serve as a manager or other employee of any other company or enterprise, or serve as a director of or consultant to, or hold any interest in, any company or 

		

		

		

		

		

		
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		enterprise that competes with the Cooperative Company, unless the Board of Directors requires otherwise.
		11.5            The Cooperative Company's basic departmental structure, including the creation of Management Personnel positions other than those specified in this Contract, shall be approved by the Board of Directors based on proposals formulated by the General Manager. The details of the Cooperative Company's organizational structure and the creation of employment positions other than Management Personnel positions shall be determined by the General Manager.

		
			

				Article 12: Conduct of Operations

		

		12.1                        Except as provided in Article 12.7 and 12.8, all operations of the Cooperative Company, including all services provided by the General Manager and Deputy General Manager shall be conducted and expenses shall be incurred only in accordance with Programs and Budgets approved by the Board of Directors in accordance with the provisions of Article 10 and this Article 12.

		12.2            Within twenty (20) days of the Effective Date and thereafter on or before December 1 each year thereafter, the General Manager shall prepare and submit to the Board of Directors a proposed Exploration Program and Budget, based on the capital contribution of Party B for the ensuing Budget Period.

		

		12.3            Within twenty (20) days after submission to the Board of Directors of a proposed Program and Budget, the Board of Directors shall hold a meeting at which the directors shall, by resolution passed in accordance with Article 10.13:

		
			
				(1)        approve the proposed Program and Budget, or a modified form of the proposed Program and Budget; or

					

					(2)        reject the proposed Program and Budget.

			

		

		12.4            If the Board of Directors fails, for any reason, to approve a Program and Budget by March I of a year, the General Manager shall be deemed to be authorized to continue operations at levels of expenditure comparable with the last approved Program and Budget unless the Board of Directors otherwise directs, and the last approved Program and Budget shall be deemed extended at the same expenditure levels.

		12.5            The General Manager shall by the twentieth (20th) day of each calendar quarter (or such shorter period of time as may be designated by the Board of Directors) submit to each Party a funding notice setting out the contributions of registered capital required to be paid into the Cooperative Company by the Parties during the calendar quarter in order to fund the approved Programs and Budgets then in effect.

		12.6            The General Manager shall promptly notify the Board of Directors of any actual or anticipated material departure from an approved Program and Budget. The General 

		

		

		

		

		

		
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		Manager shall not exceed an approved Budget by more than 10% unless expressly authorized by the Board of Directors.
		12.7           Notwithstanding any other provision of this Contract or of the Articles of Association, in case of emergency, the General Manager may take reasonable action he deems necessary to protect life or property, to protect the assets of the Cooperative Company or to comply with law or government regulation. The General Manager shall promptly notify the Board of Directors of any emergency expenditure.

		12.8            At any time the General Manager may propose the amendment of an approved Program and Budget, in which event the procedure specified in Article 12.3 shall apply.

		

		
			Article 13: Purchase and Supply of Materials, Equipment and Services

		

		13.1            The Cooperative Company may purchase equipment and machinery, tools, raw materials, vehicles, spare parts and supplies, and may obtain technology and services, required for the Cooperative Company's operations from sources within and outside China.

		13.2            Any party that performs services shall be compensated for its services and reimbursed for its costs hereunder. Compensation for services provided by contractors shall be approved by the Board of Directors of the Cooperative Company.

		
			

				Article 1.4: Labour Management

		

		14.1            Matters relating to the recruitment, employment, dismissal, resignation, wages and welfare of the staff and workers of the Cooperative Company shall be handled in accordance with the Labour Law of the People's Republic of China and the Regulations of the People's Republic of China on Labour Management in Foreign Invested Enterprises and related or relevant laws and regulations in China (hereinafter collectively referred to as the "Labour Laws"). The Cooperative Company's labour rules and policies shall be approved by the Board of Directors, and the implementation 

		

		

		

		

		

		
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		thereof shall be handled by the General Manager or under the General Manager's supervision.
		14.2            The Cooperative Company's employees, other than the Management Personnel, shall be employed by the Cooperative Company in accordance with the terms of an individual labour contract. Management Personnel shall be employed by the Cooperative Company in accordance with the terms of individual employment contracts approved by the Board of Directors.

		14.3          The general level of salary and benefits paid by the Cooperative Company to expatriate personnel shall be commensurate with that of expatriate personnel in comparable positions in foreign invested enterprises in equivalent parts of China. Subject to applicable provisions of the Labour Laws, the general level of salary and benefits of Chinese personnel shall be commensurate with that of Chinese personnel in comparable positions in foreign invested enterprises in equivalent parts of China.

		14.4       Employees will be selected according to their professional qualifications, individual characteristics and working experience. The specific number and qualifications of the employees shall be recommended by the General Manager in accordance with the operating needs of the Cooperative Company for determination by the Board of Directors. All employees must complete satisfactorily a six-month probationary period of employment before becoming regular employees of the Cooperative Company.

		14.5            The Cooperative Company shall conform to rules and regulations of the government of China concerning labour protection and ensure safe and civilized production. Labour insurance for employees of the Cooperative Company shall be handled in accordance with the Labour Laws.

		
			

				Article 15: Financial Affairs and Accounting; Distribution of Profits

		

		15.1            The General Manager of the Cooperative Company shall be responsible for the financial management of the Cooperative Company.

		15.2            The General Manager shall prepare the Cooperative Company's accounting system and procedures in accordance with the Accounting System of the People's Republic of China for Foreign Invested Enterprises and other relevant laws and regulations in China, and submit the same to the Board of Directors for adoption. The accounting system and procedures shall be filed with the department in charge of the Cooperative Company and with the relevant local department of finance and the tax authorities for the record.

		15.3            The Cooperative Company shall adopt Renminbi as its bookkeeping base currency, but shall also adopt United States Dollars, or with the consent of Party A and Parry B other foreign currencies, as a supplementary bookkeeping currency.

		

		

		

		

		

		
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		15.4            All accounting records, vouchers, books and statements of the Cooperative Company must be made and kept in Chinese. All financial statements and reports of the Cooperative Company shall be made and kept in Chinese and English.
		15.5            Translations between foreign currency and Remninbi shall be made using the median rate for buying and selling for such currency announced by the People's Bank of China on the date of actual receipt or payment by the Cooperative Company.

		15.6          The Cooperative Company shall adopt the calendar year as its fiscal year. The Cooperative Company's first fiscal year shall commence on the date that the Cooperative Company receives a business license and shall end on the immediately succeeding December 31.

		15.7            The Parties shall have full and equal access to the Cooperative Company's accounts, which shall be kept at the legal address of the Cooperative Company. The Cooperative Company shall furnish to the Parties unaudited financial reports on a monthly and quarterly basis so that they may continuously be informed about the Cooperative Companys financial performance. In addition, each Party, at its own expense and upon advance notice to the Cooperative Company, may appoint an accountant registered in China or abroad to audit the accounts of the Cooperative Company on behalf of such Party. The Cooperative Company shall permit such accountant to examine all of its accounting and financial records and other documents, provided that the auditor agrees to maintain the confidentiality of such. documents.

			

			15.8            The Cooperative Company shall engage an accountant independent of any Party and registered in China to audit its accounts and its annual financial statements and report. Drafts of the audited financial statements and report shall be provided to each Party and to the Board of Directors for review within two (2) months after the end of each fiscal year, and the final audited financial statements and report shall be completed not later than four (4) months after the end of each fiscal year or at such other time periods as declared by the Board of Directors.

		15.9            The Cooperative Company shall separately open United States Dollars foreign exchange accounts and Renminbi accounts at banks within China authorized to. conduct foreign exchange operations. The Cooperative Company, in accordance with the applicable laws of China, may also open foreign exchange bank accounts outside China.

		15.10         The Cooperative Company shall be responsible for maintaining a balance in its foreign exchange receipts and expenditures on its own through the sale of its products and through other methods permitted under the laws and regulations of China (including the conversion of currency at banks and foreign exchange adjustment centres in accordance with exchange control regulations).

		15.11         After the Cooperative Company has paid income taxes and made up any losses incurred in previous years, the Board of Directors shall determine the annual allocations to the Three Funds from the after-tax net profits and the Cooperative Company shall distribute profits to the Parties as follows:

		

		

		

		

		

		
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				(1)        Within four (4) months from the end of each fiscal year, the Board of Directors shall decide the amount of after-tax profit of the Cooperative Company, after allocation to the Three Funds, to be retained for production and operations and the amount to be distributed to the Parties in proportion to their respective Participation Ratios at the time. Unless otherwise decided by the Board of Directors, the Cooperative Company shall distribute to the Parties no less than seventy-five percent (75%) of its profits available for distribution.

					

					(2)        Losses from previous years must be made up before any profits from the current year are distributed to the Parties. Profits retained by the    Cooperative Company in previous years may be distributed together with the profits of the current year.

					

					(3)      Subject to the foreign exchange laws of China, Party B shall have a priority right to receive its share of profits from the Cooperative Company's foreign exchange, with conversion from Remninbi to United States Dollars made at the median rate for buying and selling announced by the People's Bank of China on the date on which the Board of Directors resolves to distribute profits. If the Cooperative Company does not have sufficient foreign exchange available to pay all of Party B's share of profits, the Cooperative Company upon Party B's instructions shall promptly convert the remaining amount of Remninbi profits into foreign currency at a bank or foreign exchange adjustment centre and pay such foreign currency to Party B. If the Cooperative Company is unable to effect conversion, then upon instructions from Party B, it must deposit the remaining Remminbi profits into a separate interest-bearing bank account opened in the name of the Cooperative Company, and must hold this Renminbi and the interest earned thereon in such account pending further instructions from Parry B. The Cooperative Company shall promptly comply with Party B's instructions concerning the disposition of the funds in this bank account, provided that such instructions are not inconsistent with the laws and regulations of China.

			

		

		15.12          All remittances of profits and other payments out of China to Party B shall be made in United States Dollars to a foreign bank account designated by Party B, subject to compliance with the foreign exchange control regulations of China.

		
			

				Article 16: Taxation and Insurance

		

		16.1            The Cooperative Company shall pay all taxes and duties required under the national and local laws and regulations of China. The Cooperative Company's Chinese and expatriate personnel shall pay individual income tax in accordance with the Individual Income Tax Law of the People's Republic of China or other relevant laws and regulations.

		16.2            The Cooperative Company will subinit an application for confirmation of the Cooperative Company as a Technologically Advanced Enterprise pursuant to relevant regulations and, upon receipt of such confirmation, shall register with the local tax authorities for the preferential tax treatment granted to Technologically Advanced Enterprises.

		16.3            Throughout the Contract Term, the Cooperative Company shall maintain insurance coverage of the types and in the amounts determined by the General Manager and 

		

		

		

		

		

		
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		approved by the Board of Directors. The Cooperative Company may obtain insurance from insurance companies or organizations inside and outside China, subject to compliance with the laws and regulations of China.
		
			

				Article 17: Confidentiality

		

		17.1            Prior to and during the Contract Term, each Parry has disclosed or may disclose to the other Party confidential and proprietary information concerning their respective businesses, financial condition, proprietary technology, research and development and other confidential matters. Furthermore, during the Contract Term, the Parties may obtain such confidential and proprietary information concerning the Cooperative Company and the Cooperative Company may obtain such confidential and proprietary information concerning the Parties. Except as may be provided in other relevant confidentiality agreements, each of the Parties and the Cooperative Company receiving all such information as aforesaid, including written and unwritten information, (hereinafter referred to as "Confidential Information") shall, during the Contract Term and for one (1) year thereafter:

		
			
				(1)        maintain the confidentiality of such Confidential Information; and

					

					(2)        not disclose it to any person or entity, except to their respective employees who need to know such Confidential Information to perform their work and responsibilities provided that Party A shall not be bound by the one (1) year confidentiality term if this Contract is terminated prior to Party B contributing Five Hundred Thousand US Dollars (US$500,000) to the registered capital of the Cooperative Company.

			

		

		17.2            The provisions of Article 17.1 above shall not apply to Confidential Information that:

		
			
				(1)        can be proved to have been known by the receiving party by written records made prior to disclosure by the disclosing party;

					

					(2)        is or becomes public knowledge otherwise than through the receiving party's breach of this Contract; or

					

					(3)        was obtained by the receiving party from an Other Entity having no obligation of confidentiality with respect to such Confidential Information.

			

		

		17.3            If required by either Party, the Cooperative Company shall execute a separate secrecy agreement in respect of Confidential Information obtained by the Cooperative Company from such Party or its Affiliates with provisions similar to those set out in this Article 17.

		

		

		

		

		

		
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		17.4            Each Party and the Cooperative Company shall formulate rules and regulations to cause its directors, senior staff? and other employees, and those of their Affiliates, also to comply with the confidentiality obligations set forth in this Article 17. All directors, managers and other employees of the Cooperative Company shall be required to sign a confidentiality undertaking in a form acceptable to both Parties.

		17.5            The provisions of this Article 17 shall not apply to the disclosure of information to any Affiliate, to any public or private lender or financing agency or institution, to any contractors or subcontractors that the Parties may engage, to employees and consultants of the Parties or to any Other Entity to which a Party contemplates the Transfer of all or part of its share of the registered capital of the Cooperative Company; provided that in any such case only such information as such person or entity to whom disclosure is made shall have a legitimate business need to know shall be disclosed and such person or entity shall first undertalce in writing to protect the confidential nature of such information at least to the same extent as the Parties are obligated to do under this Article 17.

		                  The provisions of this Article 17 shall also not apply to the disclosure of information to any government, any agency or department thereof or any regulatory authority, to the extent required by law or in response to a legitimate request for such information, provided that the Party being required or requested to make such disclosure shall immediately notify the other Party of such requirement and the terms thereof prior to such disclosure. The other Party shall have the right to object to the government agency or department or regulatory authority concerned to such disclosure and to seek confidential treatment of any Confidential Information to be disclosed on such terins as such Parties shall, in their sole discretion, determine.

		17.6            Without limiting the foregoing provisions o£ this Article 17, no Party shall make any public announcement or public disclosure with regard to the Cooperative Company that includes Confidential Information without the prior written consent of the other Parties as to the content and timing of such announcement or disclosure, which consent shall not be unreasonably withheld; provided that nothing in this Article 17.6 shall prevent a Party from making such an announcement or disclosure of Confidential Information which is required in the good faith judgment of such Party by applicable law, regulation or stock exchange rule.

		17.7            The provisions of this Article 17 shall remain binding upon any natural or legal person who has been a party to this Contract after such person, through an assignment of registered capital, Participation Ratio and corresponding contractual rights and obligations, ceases to be a party to this Contract. In addition, the rights and obligations under this Article 17 shall survive the expiration or earlier termination of this Contract. and shall remain in effect for the periods stated herein, notwithstanding the dissolution of the Cooperative Company.

		

		

		

		

		

		

		
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				Article 18: Contract Term

		

		18.1          The Contract Term shall commence upon the Effective Date and shall extend for a period of twenty-five (25) years from the date o£ issuance of the Business License.

		18.2            If the Board of Directors of the Cooperative Company decides to extend the Term of this Contract then an application to extend the Contract Term. for the additional period. of time recommended by the Board shall be made to the Examination and Approval Authority. The Contract Term may be extended only upon approval of the Examination and Approval Authority.

		
			

				Article 19: Termination and Liquidation

		

		19.1            In any of the following circumstances, a Party shall have the right to terminate this Contract by giving thirty (30) days' prior written notice to the other Party:

		
			
				(1)        the terminating Party has the right pursuant to the provisions of either Article 22.4 or 24.2 to terminate this Contract; or

					

					(2)        the Board of Directors determines that the activities of the Cooperative Company are for any reason no longer commercially viable or determines that the Cooperative Company be dissolved.

			

		

		19.2            Under any of the following circumstances, a Party shall have the right to terminate this Contract with immediate effect by written notice to the other Party:

		
			
				(1)        the terminating Party has the right pursuant to the provisions of Article 5.3(1) to terminate this Contract;

					

					(2)        the other Party transfers all or any part of its share of the Cooperative Company's registered capital in violation of the provisions of this Contract;

					

					(3)        the other Party otherwise materially breaches this Contract or materially violates the Articles of Association, and such breach or violation is not cured within sixty (60) days of written notice to the breaching/violating Party;

					

					(4)        the terminating Party has the right pursuant to the provisions of Article 5.5 to terminate this Contract; or

					

					(5)        the other Party is declared bankrupt, or is the subject of proceedings for bankruptcy, dissolution or liquidation, or becomes unable to pay its debts as they become due.

					

				

			

		

		19.3            Without limiting the generality of the provisions of Articles 19.1 and 19.2:

		

		

		

		

		

		
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				(1)        Party A shall have the right to terminate this Contract in accordance with the provisions of Article 53(1);

					

					(2)        Party B shall have the right to terminate this Contract by giving written notice to Party A provided that the Cooperative Company or Parry B through the Cooperative Company has paid all direct and indirect fees or liabilities incurred by the Board of Directors and General Manager of the Cooperative Company; and

					

					(3)        Upon the termination of this Contract in accordance with this Article 19.3(1), Party B shall convey, at no cost to Party A, all of its interest in the Cooperative Company to Party A and Party B shall thereafter have no interest in or right to the Cooperative Company or its assets and Party B shall have no further obligations or liabilities arising pursuant to this Contract except those which arise prior to the date of the said written notice to Party A.

			

		

		19.4            Upon termination of this Contract in accordance with Articles 19.1, 19.2 or 19.3(2), a meeting of the Board of Directors shall be convened and both Parties shall make all possible endeavours to cause the directors each appointed to vote in favour of a resolution to dissolve the Cooperative Company, and the Cooperative Company shall forthwith submit an application for dissolution to the Examination and Approval Authority. Each Party agrees to take all actions and to sign all documents, and to cause its appointees on the Board of Directors to all actions and to sign all documents that are legally required to effect termination of this Contract and dissolution of the Cooperative Company.

		19.5            Upon expiration of the Contract Tenn or approval of an application to dissolve the Cooperative Company pursuant to this Article 19, or under other circumstances in which this Contract is terminated or the Cooperative Company is dissolved, liquidation of the Cooperative Company shall be handled in accordance with the relevant laws and regulations of China and with the provisions set forth below (in so far as they do not conflict with such laws and regulations):

		
			
				(1)        The liquidation committee, which shall report to the Board of Directors, shall be made up of five (5) members, of whom one (1) shall be appointed by Party A and four (4) shall be appointed by Party B;

					

					(2)        In developing and executing the liquidation plan, the liquidation committee shall use every effort to obtain the highest possible price for the Cooperative Company's assets and, subject to compliance with Chinese foreign exchange control regulations, to sell such assets for United States Dollars or other freely convertible foreign currencies and then distribute the remaining net assets of the Cooperative Company to the Parties in. accordance with their respective Participation Ratios;

			

		

		

		

		

		

		

		
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				(3)        If it is necessary to appraise any of the assets to be liquidated, the liquidation committee shall appoint a Sino-Foreign joint venture accounting firm registered in China and independent of either Party to handle thus work; and

					

					(4)        Party B, at its own expense, shall have the right to obtain copies of all of the Cooperative Company's accounting vouchers, account books, account statements, minutes and resolutions of the Board of Directors and other relevant documents after the conclusion of liquidation.

			

		

		19.6.           The provisions of Article 19.5 shall survive the expiration or early termination of this Contract and shall remain in effect until the conclusion of liquidation under Article 19.5.

		19.7.           After termination of this Contract pursuant to Article 19.1 or 19.2 each Party shall be entitled to copies of all Mineral Data acquired or developed by the Cooperative Company before the effective date of termination but not previously furnished to that Party.

		
			

				Article 20: Breach of Contract

		

		20.1            If a Party breaches this Contract, it shall bear the liabilities arising from such breach. In the event that both Parties breach this Contract, each Party shall bear the liabilities arising from its own breach. Notwithstanding the foregoing, neither Party shall be liable to the other in relation to this Contract for any indirect or consequential loss or damage.

		
			

				Article 21: Non-Competition

		

		21.1            All transactions, contracts, purchases, operations, negotiations with Third Parties, hiring of employees and any other matters or acts undertaken on behalf of the Parties, either Party or the Cooperative Company in relation to the Cooperative Company or the conduct of Exploration or other activities permitted by the Cooperative Company's scope of business in the Cooperation Area shall be done, transacted, undertaken or performed in the name of the Cooperative Company and neither Party shall do, transact, perform or undertake anything within the Cooperation Area in its own name or in the name o£ the other Party or in the joint names of the Parties.

		21.2            Subject to this Contract, the Parties shall have the right independently to engage in and receive full benefits from business activities, whether or not competitive with operations conducted by the Cooperative Company outside the Cooperation Area. However, each Party shall devote such time as may be required to fulfill any obligations assumed by it under this Contract.

		

		

		

		

		

		
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				Article 22: Force Majeure

		

		22.1            "Force Majeure" shall mean all events which were unforeseeable at the time this Contract was signed, the occurrence and consequences of which cannot be avoided or overcome, and which arise after the signature of this Contract and prevent total or partial performance by any Party. Such events shall include earthquakes, typhoons, flood, fare, war, failures of international or domestic transportation, actions of or inactions by governments or public agencies, epidemics, civil disturbances, strikes, denial of access to the Cooperation Area and other events which are accepted as force majeure in general international commercial practice. A Party's lack of funds is not an event of Force Majeure.

		22.2            If an event of Force Majeure occurs and affects the performance of a Party's obligations under this Contract, such performance shall be suspended during the period of delay caused by the Force Majeure, and this shall not constitute a breach of contract.

		22.3            The Party claiming Force Majeure shall promptly inform the other Party in writing and shall furnish within fifteen (15) days thereafter sufficient evidence of the occurrence and duration of such Force Majeure.

		22.4            In the event of Force Majeure, the Parties shall immediately consult with each other in order to find an equitable solution and shall use all reasonable endeavours to minimize the consequences of such Force Majeure. If the occurrence or consequences of Force Majeure results in a major impairment to the functioning of the Cooperative Company for a period in excess of six (6) months and the Parties have not found an equitable solution after friendly consultation in accordance with the principle of equity and mutual benefit, then either Party may terminate this Contract, provided that the terminating Party has performed its obligations under this Article 22.4.

		
			

				Article 23: Settlement of Disputes

		

		23.1            In the event any dispute arises out of or in relation to this Contract, the Parties shall attempt in the first instance to resolve such dispute through friendly consultations. If the dispute is not resolved in this manner within sixty (60) days after the date on which one Party has served written notice on the other Party for the coriunencement of consultations, then either Party may refer the dispute to arbitration in accordance with the provisions of Article 23.2.

		23.2            The arbitration shall be conducted under the auspices of the Arbitration. Institute of the Stockholm Chamber of Commerce in Stockholm, Sweden in accordance with the Rules of said Institute. The place of arbitration shall be Stockholm, Sweden and the award shall be issued in Sweden. The arbitrators shall be given instructions that: (i) all proceedings in any arbitration shall be conducted in Mandarin and English; (ii) there shall be three (3) arbitrators, none of whom. shall be a national of the state of either 

			

			

			

			

			

		

		
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		Party and all of whom shall be fluent in English or Chinese; and (iii) Party A and Party B shall each select one (1) arbitrator. The third arbitrator shall be appointed by the Arbitration Institute and shall serve as chairman of the arbitration tribunal. The arbitration award shall be final and binding on the Parties, and the Parties agree to be bound thereby and to act accordingly.23.3            When any dispute occurs and when any dispute is under arbitration, except for the matters under dispute, the Parties shall continue to exercise their remaining respective rights, and fulfill their remaining respective obligations, under this Contract.
		23.4            In any arbitration proceeding, any legal proceeding to enforce any arbitration award and in any legal action between the Parties pursuant to or relating to this Contract, each party expressly waives the defense of sovereign immunity and any other defense based on the fact or allegation that it is any agency or instrumentality of a sovereign state.

		
			

				Article 24: Applicable Law

		

		24.1            The formation, validity, interpretation and performance of this Contract, and any disputes arising under this Contract, shall be governed by the then current laws of China. If there is no published law in China governing a particular matter relating to this Contract, reference shall be made to general international commercial practices.

		24.2            If Party B's economic benefits under this Contract are adversely and materially affected by the promulgation of any new laws or regulations of China or the amendment or interpretation of any existing laws, rules or regulations of China after the Effective Date of this Contract, the Parties shall promptly consult with each other and' use their best endeavours to implement any adjustments necessary to maintain Party B's economic benefits derived from this Contract on a basis no less favourable than the economic benefits it would have derived if such laws or regulations had not been promulgated or amended or so interpreted. If it is not possible to implement such adjustments, Party B may terminate this Contract. 24.3         The Cooperative Company and the Parties shall be entitled according to the law to enjoy any tax, investment or other preferential treatment that become available to foreign invested enterprises or foreign investors after the signing of this Contract and which are more favourable than those set forth in this Contract. The Parties agree that they or the Cooperative Company shall promptly apply, if required by law, to enjoy such preferential treatment.

		
			

				Article 25: Miscellaneous Provisions

		

		25.1            Failure or delay on the part of any Party hereto to exercise a right under this Contract shall not operate as a waiver thereof; nor shall any single or partial exercise of a right preclude any other future exercise thereof.

		

		

		

		

		

		
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		25.2            Neither this Contract nor any rights and obligations hereunder may be assigned in whole or in part by any Party except in accordance with the provisions of Article 5.7.
		25.3            This Contract is made for the benefit of Party A and Party B and their respective lawful successors and assignees and is legally binding on them. This Contract may not be amended orally, and any amendment hereto must be agreed to in a written instrument signed by both Parties and, where required by law, approved by the Examination and Approval Authority before taking effect.

		25.4            The invalidity of any provision of this Contract shall not affect the validity of any other provision of this Contract which is not affected by the invalid provision.

		25.5            This Contract is signed in the Chinese language in six (6) originals and in the. English language in six (6) originals. Both language versions shall be equally valid.

		25.6            Any notice or written communication provided for in this Contract from one Party to the other Party or to the Cooperative Company shall be made in writing in Chinese and English and sent by courier service delivered letter or by facsimile with a confirmation copy sent by courier service delivered letter. The date of receipt of a notice or communication hereunder shall be deemed to be seven (7) days after the letter is given to the courier service or one (1) day after sending in the case of a facsimile, provided it is evidenced by a confirmation receipt and the confirmation copy is sent. All notices and communications shall be sent to the appropriate address set forth below, until the same is changed by notice given in writing to the other Party.

			

		

		
			
				Party A:

					

					(Brigade 209 of the Nuclear Industry of Yunnan Province, China) No. 182, West Dongfeng Road Kunming City, Yunnan Province 650031 People's Republic of China.

					

					Facsimile No: 86-871-3648905 Attention:            Mr. Cheng Hui Ming

					

					

					Party B:

					

					Golden River Resources Corp. 1450 - 789 West Pender Street Vancouver, British Columbia Canada

					

					Facsimile No: 001 (604) 6818240 Attention:         Legal Department

			

		

		

		

		

		

		

		
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				The Cooperative Company: (Yunan Western Mining Ltd.) No. 182, West Dongfeng Road Kunming City, Yumian Province 650031 People's Republic of China.

					

					Facsimile No: 86-871-3648905 Attention:            General Manager

			

		

		25.7            Appendix 1, 2 and 3 are attached hereto, are made an integral part of this Contract and is equally binding with these Articles 1 to 25.

		25.8            This Contract constitutes the entire agreement between the Parties with respect to the subject matter of this Contract and supersedes all prior discussions, negotiations and agreements between them with respect to the subject matter of this Contract. In the event of any conflict between the terms and provisions of this Contract and the Articles of Association, the terms and provisions of this Contract shall prevail.

		25.9            Time is of the essence in the terms and conditions of this Contract. A Party that fails to comply shall assume responsibility for any adverse consequences.

		25.10          1f timing causes any matter to occur or expire on a day which is not a Business Day, the first Business Day that follows shall be considered the day of expiry or occurrence.

			

			

			

			

			IN WITNESS WHEREOF, the duly authorized representative of each Party has signed this Contract in Kunming City, Yunnan Province, People's Republic of China on the date set forth below.

		By:                                                                                     By:

			

			

			Name: Mr. Cheng Hui Ming                                                Name: Jason Birmingham

			Nationality: Chinese                                                            Nationality: Canadian

			

			

			

			

			

			

			

			

			

			

			

			

			

			

			

			

			

			

			

			

			

			

			

		

		
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