Attach to Exhibit 10.21
Attached hereto is an English translation of the original Spanish version
of the Joint Venture Agreement between Comibol and ASC Bolivia LDC, regarding
the Choroma Concession. The Company employed translators to translate the above
referenced agreement and based on this the undersigned believes that the
attached is a fair and accurate English translation of the above referenced
agreement.
/s/ Xxxxx X. Xxxxxx
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Xxxxx X. Xxxxxx
Director
Apex Silver Mines Limited
Date: August 29, 1997
EXHIBIT 10.21
PROTOCOL No.244/97
FOR THE: JOINT VENTURE CONTRACT WRIT FOR THE DEVELOPMENT OF MINING ACTIVITIES;
SUBSCRIBED BETWEEN THE CORPORACION MINERA DE BOLIVIA (COMIBOL) REPRESENTED BY
ITS PRESIDENT XX. XXXXXXX XXXXXXX XXXXXX AND ITS CONTRACTS AND FINANCES MANAGER
LIC. XXXX XXXXX XXXXXXX; AND ASC BOLIVIA LDC REPRESENTED BY XXXXXX XXXXXXX
ACHAVAL.
In La Paz City, Republic of Bolivia, at fifteen thirty hours August fourteen
ninety seven, before me, lawyer XXXXX XXXXXX XXXXXXXX H., SPECIAL NOTARY OF
MINES AND PETROLEUM and witnesses that at the end are named and sign the
document, presented themselves, on one side XX. XXXXXXX XXXXXXX XXXXXX with ID
1191230 Pt. and LIC. XXXX XXXXX XXXXXXX with ID 332387 LP, PRESIDENT AND MANAGER
OF CONTRACTS AND FINANCES RESPECTIVELY, FOR THE "CORPORATION MINERA DE BOLIVIA"
and on the other side ENG. XXXXXX XXXXXXX ACHAVAL with ID 39745 LP,
REPRESENTATIVE FOR "ASC BOLIVIA LDC," all full of age, able by right, neighbors
of this city, whom I certify to have identified and said: That, they agree to
convert into a public deed the WRIT that has been presented to me, together
with: ASC BOLIVIA LDC'S PROPOSAL, PAGES 5, 9, 10 AND 11, BOARD OF DIRECTOR'S
RESOLUTION NO. 1105/96, GENERAL BOARD OF DIRECTORS' RESOLUTION No. 1229/96,
SUPREME RESOLUTION No. 213601/94, POWER OF ATTORNEY No. 140/94, POWER OF
ATTORNEY NO. 205/94 AND POWERS WRIT No. 105/96, with literal contents as
follows:
WRIT.- CONT. GUC-DJ-352/96 SPECIAL NOTARY OF MINES: In the public deeds
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register under your charge, please insert a Joint Venture Contract for the
development of mining activities subscribed between the CORPORACION MINERA DE
BOLIVIA (COMIBOL) and ASC BOLIVIA LDC company, with the clauses and conditions
given below:
FIRST.- THE JURISTIC PERSON OF THE PARTIES AND THE LEGAL STATUS OF THE
SUBSCRIBING PERSONS.
1.1. This Joint Venture Contract is subscribed by, on one side, the CORPORACION
MINERA DE BOLIVIA, known from now on as COMIBOL, a decentralized Autarkic
Entity of the State, created by S.D.3196 dated October two, nineteen fifty
six, enacted as Law on October twenty nine, nineteen fifty six, with its
own juristic person and full administration autonomy, exercising the
Administration and Higher Direction of all the mining deposits, dumps,
tailings and slags, establishments, facilities, camps, complementary
property in general, without exception, constituting the state owned
mines, either these be as a result of the mines' nationalization or
purchased after it
1.2. On the other hand, the company subscribing the CONTRACT IS ASC BOLIVIA
LDC, a stock company, SUBSIDIARY OF ANDEAN SILVER CORPORATION LDC, an
international mining company constituted in the Great Cayman Islands,
through constitution certificate
dated September seven, nineteen ninety five, whose original copy has been
certified by the Bolivian Consulate in London (England) on the 14th of the
same month and year, a legally constituted subsidiary in Bolivia, through
Public Deed No 49, granted by the Special Notary oF Mines in La Paz on
November ten, nineteen ninety five, registered in the General Registry of
Commerce and Stock Companies, under Registration No 00-000000-00 dated
December six, nineteen ninety five and in the Unique Taxpayers' Register
with RUC No 7836635.
1.3. LEGAL STATUS OF THOSE SUBSCRIBING.
COMIBOL'S subscribes the Contract represented by its PRESIDENT, XX. XXXXXXX
XXXXXXX XXXXXX, who exercises the legal representation of the entity by
virtue of S. D 23727 dated February elevens nineteen ninety four, by
official appointment given by Supreme Resolution No 213601 dated February
sixteen of the same year and exercising the powers conferred to him by
COMIBOL'S General Board of Directors, through Resolution No 896194 dated
March fifteen. Nineteen ninety four, as well as LIC. XXXX XXXXX XXXXXXX,
MANAGER OF THE CONTRACTS AND FINANCES UNIT, appointed in such position
through COMIBOL'S General Board of Directors' Resolution No 860/94 dated
June thirteen, ninety four and empowered through Special Power of Attorney
by the said PRESIDENT OF COMIBOL, through instrument No. 222/94 dated July
eleven, nineteen ninety tour before a Public Notary in La Paz in charge of
Dra. Xxxxx Xxxxxx and Registered in the Notary of Mines in La Paz, under No
205 dated July twenty eight, nineteen ninety four; which will be enclosed
in the corresponding public deed
14. Subscribes the Contract, in representation of ASC BOLIVIA LDC, by virtue of
the Limited Power of Attorney conferred to him, Mr. XXXXXX XXXXXXX ACHAVAL,
as its truly and legal agent and proxy, through instrument granted on March
seven, nineteen ninety six before Notary Public in the Cayman Islands,
Xxxxxx X Xxxxxxxxxx, certified by the Bolivian Consul in London (England),
documents that have been judicially translated from English into Spanish,
by orders from the Fifth Civil Judge in La Paz, and registered before the
Special Notar of Mines of this Capital City, under No 105 dated April
first, nineteen ninety six and registered in the General Register of
Commerce under item No 798 of Book 07-0 on the eighth of the same month and
year. Special power of attorney that, as a whole, will be enclosed in the
corresponding Public Deed.
SECOND.- BACKGROUND FOR THE CONTRACT.
2.1. Applying the Supreme Government's Mining Policies and within the framework
of the legal provisions in force, valid for this matter, COMIBOL has
publicly invited national and foreign Mining Companies, interested in the
EXPLORATION with option to the EXPLOITATION and posterior MARKETING of the
non-developed mining deposits, among others, those from the SUD CHICHAS
Province zone in the Department of Potosi, so that they present proposals
to that end, and the Terms of Reference and the legal and administrative
requirements for the Public Tender have been widely advertized. In order to
guarantee the total legality of the public tender's results, as well as the
greatest efficiency in the evaluation of the proposals to be presented,
independent consulting firms of recognized technical experience and company
solvency were equally invited. The
2
evaluation's result made by XXXXX XXXXXXX & COMPANY INC., the selected
independent consulting firm, as can be seen in the Report dated September
nineteen ninety six, chose ASC BOLIVIA LDC for the awarding of the JOINT
VENURE CONTRACT for the Mining Concessions described later on and that form
part of ANNEX "A" of the Contract, a report that has been approved by
COMIBOL'S Board of Directors through Resolution No. 1105/96 dated February
six, nineteen ninety six and that at the same time authorized the
negotiations for the respective CONTRACT with ASC BOLIVIA LDC.
THIRD.-DEFINITIONS.
The following definitions are established in this Contract. in an enunciative
but not limitative manner:
3.1. AREA GRANTED.- MINING concessions belonging to COMIBOL included in
------------
Contract and whose total surface area is 125 hectares. The concessions of
the AREA GRANTED are individually described in page five of the Technical-
Economical Proposal presented by ASC BOLIVIA LDC and in ANNEX "A" of the
Contract. COMIBOL at the express and written request by ASC BOLIVIA LDC can
formulate petitions or grant complementary areas neighboring with the AREA
GRANTED, in which case ASC BOLIVIA LDC will prepare a specific work plan
and will guarantee a minimum investment in the same conditions as those for
the AREA GRANTED.
3.2. INVESTED CAPITAL.- Are all the expenses and investments made by ASC
----------------
BOLIVIA LDC for the exploration and development of the mineral reserves,
preparation of pre-feasibility and feasibility studies. basic and hi-detail
engineering designs; purchase, transport and import of equipment, machinery
and materials: installation of all the mine equipment and machinery,
mineral concentrating and refinery plants, workshops, laboratories,
warehouses, offices. etc.. building of camps and buildings, tailings and
waste accumulation systems, energy distribution systems, energy plants,
safety systems, water catchment and accumulation systems; etc. and starting
of the production operations, according to generally accepted accounting
principles.
3.3. MINING CONCESSIONS.- Set of mining properties (AD. 33 of the Mining Code),
------------------
in which the activities established in the Contract can be performed.
3.4. MARKETING COMMISSION FEES.- Payment in money for the administration of the
-------------------------
sale of the mineral metals produced by ASC BOLIVIA LDC. These commission
fees do not form part of the marketing costs.
3.5. PRODUCTION COSTS.- Are all the operational expenses made by ASC BOLIVIA LDC
----------------
during the minerals production process up to the obtaining of the saleable
or exportable final products in the mine, either these be mineral
concentrates or metals, according to generally accepted accounting
practices and principles.
3
3.6. OVERHEADS.- Are all the expenses made by ASC BOLIVIA LDC for the
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administration and direction of the Joint Venture Contract, different from
the production costs, according to generally accepted accounting practices
and principles.
3.7. MARKETING COSTS. - Are all those that are done in order to convert the
---------------
minerals in metals, by the smelter or refining company; they include
metallurgical deductions, treatment, smelting and refining expenses,
analysis, assays, arbitrations, penalties and other deductions and
expenses directly related to the conversion process to marketable metals.
3.8. DEPRECIATION. - A deduction made according to Bolivian laws. due to the
------------
reduction, wear and value loss of the capital assets, for their
replacement.
3.9. DELIVERY. - The date on which COMIBOL will deliver physically and
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officially the AREA GRANTED to ASC BOLIVIA LDC. The physical delivery will
be documented by the detailed minutes to be drawn up in some place of the
AREA GRANTED. The minutes will be signed by the parties' representatives
appointed for that purpose, with a prior written notice between them. The
delivery will be done not later than thirty (30) days after the CONTRACT
is signed.
3.10. OPERATIONAL CASH FLOW. - It is the gross value of sales' expenses minus
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the realization expenses, marketing commission fees, marketing costs,
production costs and administrative costs, excluding the financial
expenses, depreciation, deferred expenses and taxes.
3.11. REALIZATION EXPENSES.- Are all those directly related to the transport of
---------------------
concentrates or final products from the mine up to the smelters; they
include losses, road, air and sea transport tees, transport insurance.
handling, port expenses and other related. these realization expenses do
not form part of the Marketing Costs.
3.12. DEFERRED EXPENSES.- Are all the payments or charges made and whose
-----------------
application is deferred until certain terms laid down previously are met
or the application period for the expense has expired.
3.13. FINANCIAL EXPENSES.- Are all the debt services for banking credits or from
------------------
financing entities hired by ASC BOLIVIA LDC for the compliance and
execution of the Joint Venture Contract.
3.14. TAXES.- Are all the national, municipal taxes, or of any other type,
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already created or to be created by Law, applied to the mining operations
developed bY ASC BOLIVIA LDC, as a result of this Contract.
3.15. PAY BACK PERIOD.- Any period, either being the initial one or a posterior
---------------
one, including the month starting in which an expense has been made for
capital improvements and prior to the first day of the following month to
that in which ASC BOLIVIA LDC has recovered all the costs and expenses for
capital improvements from the Cash Flow.
4
3.16. PRODUCT(S).- All the materials, minerals, precipitates from mining
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resources, concentrates, core, and any other product or sub-product,
originated in the AREA GRANTED.
3.17. PAY BACK.- Means the date on which ASC BOLIVIA LDC'S shareholders have
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received all the costs and expenses for capital improvements from the Cash
Flow, really made and registered according to generally accepted
principles in Bolivia. The calculation will be done ate the end of each
ASC BOLIVIA LDC'S fiscal year. Nonetheless, COMIBOL'S participation,
mentioned in paragraph 11.1.2, will be applied from the moment the pay
back is finished.
3.18. SALE CROSS VALUE.- Are the payments to be received by ASC BOLIVIA LDC,
----------------
from natural or juristic third persons, for the sale of refined metals or
concentrates, produced during the exploitation period, from which all the
expenses and costs established in point 3.7 will be deducted.
3.19. NET SMELTER RETURN.- It is the gross value for the sale of the minerals,
------------------
minus the marketing costs and the realization expenses.
FOURTH.- APPLICABLE LAWS.
4.1. This Contract is subscribed and is regulated by the legal provisions that
in a mere enunciative but not limitative manner are given below:
Arts. 136 and 138 of the Poll Const. of the State, S.D. 3196 (2-10/52), L.
(2910/56), L. 843 (2005/86), S.D. 22407 (11-0 1/901 S.D. 22408 (11-01190),
L. 1182 ( 1 7-09/90), L. 1 297 (27-11/9 1 ), S.D. 23059 (13-02/92), L. 1243
(11-04/92), L. 1333 (29-04/92), its regulations enacted through S.D. 24176
dated 8/12/95, S.D. 23214 (21-07/92), S.D. 23230-A (30-07/92) and other
legal provisions on the matter or to be enacted in the future. This Joint
Venture Contract was approved by COMIBOL'S Board of Directors, through
Resolution No. 1229/96 dated 27-09-96.
FIFTH. - THE JOINT VENTURE CONTRACT, TRADE NAME AND ADDRESS.
5.1. The Joint Venture Contract, constituted by this document. known from now
on as CONTRACT, does not compromise the patrimony of any of the associated
parties nor it affects h1 any way the juristic person of the hiring
parties; it neither constitutes a partnership, nor it establishes an
independent juristic person. It is not established in the CONTRACT, for
the associated parties, a jointly and severally nor limited responsibility
for the acts, contracts and obligations each party could male, celebrate
and assume in the execution and compliance of this CONTRACT.
5.2. As a result from the CONTRACT, ASC BOLIVIA LDC does not acquire any
property rights in the civil regime nor as mining concessionaire in the
mining regime, on the soil nor the underground of the AREA GRANTED, nor on
the water nights, servitudes and uses, access roads, camps, constructions
or any other facilities that could exist.
5
5.3. In the terms and conditions stated in the CONTRACT, COMIBOL grants ASC
BOLIVIA LDC. in an express manner, the exclusive exploration rights, the
option to enter into a exploitation phase, once the first exploration
phase is completely finished, as well as the marketing of the minerals to
be exploited over a surface are of One Hundred and Twenty Five (135)
hectares of the Mining concession "CHOROMA", located in Tupiza County, Sud
Chichas Province of the Department of Potosi , whose detail is expressed
in ANNEX "A" of the CONTRACT.
5.4. This exclusive right, in the conditions stated in the CONTRACT, is the
sole and total COMIBOL'S contribution to the Joint Venture Contract agreed
upon in this document, and comibol does not acquire any obligation nor
responsibility for the execution and compliance of the CONTRACT. It also
means that COMIBOL, during the time the CONTRACT is in force, will not
reduce, cede, affect nor compromise its rights and interests on the
deposits contributed to the joint venture, in any measure nor for any
motive, guaranteeing ASC BOLIVIA LDC the peaceful possession, the use and
enjoyment of the mining concessions object of the CONTRACT.
5.5. The parties, by mutual agreement, convene in appointing this Joint Venture
Contract with the trade name of COMIBOL-ANDEAN-CHOROMA R.C., with legal
address in La Paz City, Xxxxxx Street No. 265, Telephone 433800, Fax
(5912) 433737.
SIXTH.- OBJECT OF THE CONTRACT.
6.1. Based on the background given before, COMIBOL and ASC BOLIVIA LDC, through
this document agree to subscribe a Joint Venture Contract for the
exploration, and option to exploit, concentrate, refine and smelt without
any reserve and the marketing of the mineral products, metals and sub-
products that could be exploited in the deposits located in the AREA
GRANTED, under the technical conditions described in ASC BOLIVIA LDC'S
proposal and accepted by COMIBOL, as laid down in its proposal and that
constitutes annex "b" of this CONTRACT. documents that, without being
registered, are an inseparable and constitutive part of this CONTRACT.
6.2. The activities object of this CONTRACT, comprise the identification and
development of reserves, design of the mining operation, rational and
efficient exploitation of the mineral resources, optimization of the
treatment and metallurgical recovery processes, preparation of the
respective technical and economical feasibility projects and, in general,
the application of modern technology and an efficient management in the
performance of the mining operations, as well as comply with the
environmental obligations established by law, according to clause
seventeenth of the CONTRACT.
SEVENTH.- TERM FOR EXPLORATION
7.1. The maximum term for the Exploration Period will be of Five (5) years
starting from the physical and official delivery of the AREA GRANTED in
this CONTRACT, by
6
COMIBOL to ASC BOLIVIA LDC, this delivery will be documented through
detailed minutes drawn up in the site or where the parties agree to, and
must be signed by the officials appointed to that effect, with the
presence of a competent authority.
7.2. The said term of five (5 ) years for exploration. is divided in three (3 )
phases as follows:
FIRST PHASE with a duration of twenty four (24) months.
SECOND PHASE with a duration of twenty four (24) months.
THIRD PHASE with a duration of twelve ( 12) months.
TOTAL SIXTY (60) months, equivalent to FIVE (5) YEARS.
7.3. The First Phase is compulsory and thus its strict observance is guaranteed
by ASC BOLIVIA LDC, according to that laid down in Clauses 9.1 and 9.2 of
this CONTRACT.
7.4. During the First Phase. ASC BOLIVIA LDC, will execute the Work Program
appearing in page 6 to page 8 of its accepted and awarded Proposal, a work
plan that will form part of this CONTRACT without the need of its
registration, ASC BOLIVIA LDC con explore the whole of the mining
concessions or part of them at its will, but in any sector, the work plan
will be executed faithfully and fully. COMIBOL, at the written and express
request by ASC BOLIVIA LDC, can formulate mining petitions or grant
complementary areas within the two (2) kilometers neighboring the area
granted, in which case ASC BOLIVIA LDC will formulate a specific work plan
and will guarantee a minimum investment to be made in such complementary
areas that will be subject to the same conditions established for the work
plan as well as the minimum investment for the AREA GRANTED.
7.5. ASC BOLIVIA LDC, during the First Phase, can anticipate the conclusion of
the twenty four (24) months term, under the express condition of having
finished the execution of the Work Program committed for this Phase and,
as a result, can enter into the other Exploration Phases or exercise
immediately its option rights to enter into the Exploitation Phase in the
areas its studies would have determined as positive. In this case, the
Bank Guarantee Certificate for the Compliance of the CONTRACT will be
returned by COMIBOL, within sixty (60) days once the First Exploration
Phase is finished. The observance of the Work Plan, as well as the start
of the Exploitation will be irrevocably verified by COMIBOL, which will
issue the detailed reports of one and other situation, within sixty (60)
days.
7.6. ASC BOLIVIA LDC, at any time during the First Phase, but only after having
complied with the Minimum Work Program and not later than the last day of
the maximum term for the Phase can definitely suspend the Exploration in
the areas object of this CONTRACT and withdraw from the Joint Venture
Contract, in the case that the CONTRACT will be canceled of full right on
the date of ASC BOLIVIA LDC'S notice to COMIBOL of its decision. Should
ASC BOLIVIA LDC hadn't fulfilled with the Minimum Work Program, COMIBOL
will cash the Bank Guarantee Certificate for Contract Compliance, without
any right to recourse, claim nor any exception ASC
7
BOLIVIA LDC could oppose against COMIBOL, either judicially or outside the
court. The Joint Venture Contract will, thus, become null and without any
legal validity.
7.7. The simple reduction of the surface area of any of the areas, forming part
of the AREA GRANTED according to that recommended by the studies done by
ASC BOLIVIA LDC, will not mean the suspension of the exploration to the
ends expressed in the previous point 7.6 and ASC BOLIVIA LDC is obliged to
continue the execution of the Work Plan committed in its proposal on the
areas selected as attractive, which will be done until the conclusion of
the term established for the First Phase.
EIGHT. - EXPLORATION INITIAL PAYMENTS.
8.1. ASC BOLIVIA LDC, according to the public tender s terms of reference, will
pay COMIBOL the following exploration initial payments scale.
FIRST PHASE three 57/100 American Dollars ($us 3.57) per hectare on the
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whole surface of the AREA GRANTED, that is to say, 125 hectares.
8.2. The payments described and stated in the previous Point (8.1), will
be paid on the 125 hectares or mining properties, within thirty (30) days
after the physical delivery of the concessions by COMIBOL to ASC BOLIVIA
LDC. Any reduction in the surface area of any of the concessions of the
AREA GRANTED, either be during a maximum term of 24 months, or of the
Second or Third Phases, will not give rise to a return or reimbursement of
the Exploration Initial Rates agreed upon in Numbers 8.1, 8.3 and 8.4 of
this CONTRACT, by COMIBOL to ASC BOLIVIA LDC and the amounts paid will be
consolidated in COMIBOL'S favor .
8.3. SECOND PHASE: One Hundred and Nineteen 05/100 American Dollars ($us
119.05), per hectare on the extension of the concessions that at the start
of the Second Phase, decides to explore within the teen of 24 months
established for this Phase. The discontinuity of the exploration
operations is admitted within a same mining concession. The First Phase
area can also be reduced or request COMIBOL, or perform mining petitions
to the State or larger extensions should there be tree land, according to
that explained in the Twenty Sixth Clause of this CONTRACT and according
to that laid down in the last part of Clause 7.4 of the CONTRACT, ASC
BOLIVIA LDC is obliged to notify COMIBOL of any areas' reduction of the
AREA GRANTED with a thirty (30) days notice prior to the ending of the
proceeding Phase Term. It will also notify of any anticipation in the term
due to having entered into the Exploitation Phase under the same
conditions.
8.4. THIRD PHASE: Five Hundred and Ninety Five 24/100 American Dollars ($us
595.24) per hectare as an Exploration Initial Rate on the mining
concessions' extensions, that at the start of the Third Phase decides to
explore within TWELVE ( 12) MONTHS.
In this phase, the exploration operations discontinuity is admitted within
the same concession. The exploration area can also be reduced with
relation to the First and
8
Second Phases or request COMIBOL or make mining petitions to the state for
a larger extension should there be free land according to that laid down
in Clause Twenty Sixth of this COMIBOL. ASC BOLIVIA LDC is obliged to
notify COMIBOL of any areas reduction in the AREA GRANTED, with no less
than THIRTY (30) DAYS notice before the end of the Second Phase. It will
also notify COMIBOL of the anticipated conclusion of this Phase's term
when it decides to enter into the Exploitation Phase.
8.5. All the Payments for the Exploration Initial Rates established in Points
8.1, 8.2, 8.3 and 8.4 previous, will by done by ASC BOLIVIA LDC before the
start of the corresponding Phase and within a maximum of thirty (30) days,
in COMIBOL'S of flees in La Paz city, receiving the corresponding fiscal
receipts for tax purposes.
NINTH.- MINIMUM GUARANEED INVESTMENT DURING THE FIRST EXPLORATION PHASE.
9.1. According to the Public Tender's Tends of Reference, ASC BOLIVIA LDC
accepts and is compelled to make an guaranteed Minimum Investment during
the First Phase of the Exploration period Of Two Hundred Thirteen Thousand
00/100 American Dollars ($us 213,000.00) pledged in the Budget and
Investment Plan, page 9 of its Proposal.
9.2. As a result, ASC BOLIVIA LDC guarantees the Minimum Total Investment of
the amount established in the previous Point, through the presentation to
COMIBOL of a Bank Guarantee Certificate for Contract Compliance, issued
irrevocably in favor of COMIBOL by BHN MULTIBANCO Bank of LA PAZ CITY,
under No. 10004176 dated 05-02-97 for Forty Two Thousand Six Hundred
00/100 American Dollars ($us 42,600.00), equivalent to twenty percent
(20%) of the amount of the minimum investment pledged.
9.3. Whilst ASC BOLIVIA LDC, during the First Phase, is malting the
corresponding investments, can request COMIBOL the presentation of the
original Guarantee Certificate, substituting it simultaneously with a new
certificate covering the remainder of the guarantee or the investment not
yet made, and/or the corresponding tend until, within twenty four (24)
months. Or before if the First Phase of the exploration term is
anticipated, the minimum investment pledged has teen made according to
Clauses 7.3 and 9.1 of this CONTRACT. The Guarantee Certificates exchange
will be done within maximum 30 days, with a prior COMIBOL'S verification
and acceptance that the investments made by ASC BOLIVIA LDC, through
documented evidence, with attesting and independent auditor's report.
9.4. If once the last day of the twenty four (24) month period for the First
Phase has expired, there would be a balance of investment not made by ASC
BOLIVIA LDC, COMIBOL can cash the Bank Guarantee Certificate valid at that
date, and ASC BOLIVIA LDC won't be able to oppose a recourse nor an
exception of any nature.
9
9.5. The Exploitation Phase can only be entered into once the amount for the
minimum investment has been really and totally invested by ASC BOLIVIA
LDC, either this occurs at the end of the term appointed for the First
Phase of prior to any of the terms established for each one of the Phases,
which will be decided by ASC BOLIVIA LDC for having determined a positive
sector in any of the concessions.
9.6. The Three Phases forming part of the Exploration Period. have the purpose
of developing mineralogical reserves. Design of the treatment plants and
the preparation of a rational and mechanized exploitation plan, design and
optimization of the treatment processes and metallurgical recovery, the
preparation of technical economical feasibility projects and the adoption
of appropriate environmental protection measures. pollution control and
soil recovery, objectives that are described in the World; program of ASC
BOLIVIA LDC'S proposal.
9.7. Thus, it is agreed that, if ASC BOLIVIA LDC considers attractive certain
areas to start in them the Exploitation Phase, at any time within the
established periods for any of the Three Phases, but if and when the Work
Program of the Exploration Program of ASC BOLIVIA LDC'S proposal has been
complied with entirely as described in ANNEX "B" of this CONTRACT and the
minimum investment has been totally made, apart from the technical-
economical feasibility study, ASC BOLIVIA LDC can enter into the
exploitation phase, and must notify COMIBOL of this decision or the
purposes of the verification of the compliance of the beforesaid
conditions and the financial-accounting management of the COMIBOL'S share
established in ASC BOLIVIA LDC'S Proposal.
9.8. If ASC BOLIVIA LDC does not exercise its Exploitation option rights at the
end of the Exploration Period, either if it occurs at the expiry of any of
its Phases determined in the contract. or before, by ASC BOLIVIA LDC'S
decision, the latter is obliged to present COMIBOL, without any charge or
reimbursement of any nature, all the technical information, drawings,
maps, designs, calculations and reports.
9.9. The suspension or no performance of the compulsory minimum investment
pledged by ASC BOLIVIA LDC, withal the times and conditions stated in this
CONTRACT, will mean for all legal purposes, the statement by ASC BOLIVIA
LDC of its decision to withdraw from the Joint Venture Contract.
constituted in this contract and COMIBOL, without the need to comply with
a prior special formality, will cash the Bank Guarantee Certificate
presented by ASC BOLIVIA LDC, without any right to recourse, exception or
protest any by the latter, either judicially or out of court.
9.10. As a result, all the extension of the AREA GRANTED, object of this
CONTRACT will be reverted to COMIBOL'S total domain within ninety (90)
days maximum, ASC BOLIVIA LDC must withdraw all the equipment and
machinery employed until then, assuming the costs and risks. The
buildings, access roads and other facilities adhered to the ground that
would have been installed will remain for COMIBOL benefit as
improvements, without the right to a reimbursement nor any type of
compensation and the CONTRACT will be extinguished purely and simply. The
equipment and machinery
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adhered to the ground can also be withdrawn if and when the foundations
nor the wall to which they are adhered to, are not destroyed. This tasks
will be executed under ASC BOLIVIA LDC'S exclusive risk and charge.
9.11. If the exploration areas cover only part of the AREA GRANTED, they must
conform squares parallel to the perimeter of such concessions.
9.12. The areas that in tune are rejected by ASC BOLIVIA LDC' at the end of
each exploration Phase, will be excluded from the CONTRACT and will be
everted to COMIBOL exclusive domain. In turn, the new areas will be
annexed to the CONTRACT, in the conditions stated in Clauses 3. i and
7.4 of the CONTRACT.
TENTH.- TIIE EXPLOITATION PERIOD
10.1. Once all the stated conditions in this CONTRACT are complied with, for
the first and, in its case, for the Second and/or Third Phases of the
Exploration Period by ASC BOLIVIA LDC, without any exception, not later
than the last day of the maximum term for each phase, ASC BOLIVIA LDC
trill notify COMIBOL about the areas it has selected in order to start
the Exploitation period of the deposits contained therein, which will
mean the exercise of its option rights, which will be notified to
COMIBOL through a notarized letter, enclosing the technical-economical
feasibility studies for the exploitation to be done and the marketing of
the products.
10.2. COMIBOL will issue its approval of the feasibility study or its
observations to it, within ninety (90) days. COMIBOL can pose
observations due to technical and economical reasons, the same all be
transmitted to ASC BOLIVIA LDC for their solution. if ASC BOLIVIA LDC
dissents from COMIBOL'S opinion, the dispute will be resolved via the
arbitral procedures established in Clause Twenty Third of this CONTRACT.
10.3. When ASC BOLIVIA LDC exercises its exploitation option rights, the
parties will not be subject to any negotiation, limiting themselves to
the compliance of the provisions in this CONTRACT.
10.4. Before the Exploitation Period is started, ASC BOLIVIA LDC is empowered
to establish the non-attractive areas and that will be rejected, the
same will be reverted of right to COMIBOL'S whole domain and will be
automatically excluded from this Joint Venture Contract.
10.5. COMIBOL will exercise its full and unrestricted right and administrative
powers on the areas rejected.
ELEVENTH. - COMIBOL'S SHARE OF THE EXPLOITATION RESULTS.
11.1. COMIBOL'S share during the exploitation period is established as
follows, according to ASC BOLIVIA LDC'S fourteen pages' Proposal
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11.1.1. During the recovery period of the invested capital by ASC BOLIVIA LDC
in the construction, installation and starting stage of production
operations, ASC BOLIVIA LDC will pay COMIBOL an income equivalent to
Five percent (5%) of the Positive Operational Cash Flow, according to
the definition given in Clause Three, Point 3 10 of this CONTRACT.
11.1.2. After the repayment of the initial investment, ASC BOLIVIA LDC will pay
COMIBOL Fifteen percent ( 1 Who) of the Positive Operation Cash Flow as
defined in Clause Three. Point 3 10 of this CONTRACT.
11.1.3. In case ASC BOLIVIA LDC makes new investments for the expansion of
perations or for the change of method or processes, excluding the
replacement of assets, COMIBOL share will come down again to Five
percent (5%) of the Positive Operational Cash Flow, during the recovery
period for the new investments.
11.1.4. The periodicity of the shares' payments by ASC BOLIVIA LDC to COMIBOL
will be done every three months, with annual settlements or adjustments
11.2. It is expressely agreed that COMIBOL during all the time this CONTRACT
is in force will have the right to supervise, verify and control the
regularity of the financial processes described in the proceeding
points 11 1 1, 11 1 2, 11 1 3, 11 1 4 and 11 1 5, through the
accounting analysis of ASC BOLIVIA LDC'S documents, in order to
establish exactly COMIBOL'S share, and ASC BOLIVIA LDC is obliged to
disclose to COMIBOL the complete and authentic documents so that the
financial and accounting revisions be effective ASC BOLIVIA LDC is also
compelled to employ generally accepted accounting principles, for the
accounting of its financial and marketing operations the supervision,
verification and control for the operations accounting, will be done by
comibol in ASC BOLIVIA LDC'S offices and will be executed periodically,
according to that determined by the Administration Committee in the
Internal Regulations approved by the parties.
TWELVETH. - CONSTRUCTION, INSTALLATION, STARTING AND OPERATION STAGES.
12.1. The Construction. Installation and Starting of the Operations as a
whole, will not exceed Three (3) years starting as of the date ASC
BOLIVIA LDC notifies COMIBOL as stated in point 10.1 of Clause Tenth of
this CONTRACT, unless force majeure defined later on in this CONTRACT.
12.2. During the Exploitation Period, ASC BOLIVIA LDC will hold the exclusive
administration and will run all the risks of the operations, with
absolute autonomy in managerial decision mailing. With the same reaches
and risks will also have the exclusive
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administration and autonomy in the marketing of the minerals it
produces, without any limitation, either be locally or through
exports.
12.3. COMIBOL will not be held responsible at all for the development or the
financial results of the operations, its performance will be limited to
the punctual perception of its share in the Cash Flow and its share in
the coordinating, information and supervision organisms.
12.4. Nonetheless. the hiring parties agree that the administrative expenses
of the joint venture can not exceed Five percent (5%) of the production
direct costs. Equally, it is also stated that the marketing commission
and the realization costs can not exceed' as a whole, Two percent (2%)
of the Net Smelter's Return.
12.5. ASC BOLIVIA LDC will establish and execute a minerals marketing system
that will allow an efficient, transparent management, guaranteeing the
nonexistence of eventual benefits within or outside the country, for
the benefit of one of the parties to the detriment of the other.
12.6. The purchase of equipment, machinery, materials, facilities and raw
materials by ASC BOLIVIA LDC will be done in such manner that the
interests of the parties will not be affected and in particular
COMIBOL'S share.
THIRTEENTH. - TERM OF THE CONTRACT.
13.1. This Joint Venture Contract will have a term of Forty (40) Years,
starting as of the physical and official delivery of the areas stated
in this CONTRACT BY COMIBOL TO ASC BOLIVIA LDC. This term will be
renewed in the same contract conditions for just one more time, with a
prior technical and economical justification, if ASC BOLIVIA LDC
expresses, in writing, its will to do it. The stated term includes the
exploration period, either be in its entirety (5 years) or less, if asc
bolivia ldc enters into the exploitation period beforehand according to
that laid down in Clause 8.4 of the CONTRACT.
FOURTEENTH.- INVESTMENTS AND FINANCING.
14.1. ASC BOLIVIA LDC is empowered to finance on its account and risk the
exploitation operations, either be with its own resources or front
others.-COMIBOL will not acquire at any time any type of obligation
related to such financing, whose service will be exclusively in charge
of ASC BOLIVIA LDC.
14.2. The previous popovers are translated in that ASC BOLIVIA LDC is obliged
and pledges to perform all the necessary investments in order to
implement into the operations modern technology, services, machinery,
equipment, implements, materials, facilities, constructions and such
like, as well as assume the commitments that will allow a rational
exploitation of the mineralogical deposits of the AREA GRANTED, object
of this CONTRACT.
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14.3. The investments' regime, initial as well as future, will respect
invariably and at all times, that stated in Clauses Eleventh of this
CONTRACT, relative to COMIBOL'S share of the results, regime that will
remain unvariable during the whole term of the CONTRACT.
FIFTEENTH.- LABOR RELATIONS.
15.1. The hiring and administration of the workforce, technicians and
employees during the exploration stage, as well as during the
exploitation stage is of the absolute and total responsibility of ASC
BOLIVIA LDC, and it is of its entire responsibility the compliance with
the Labor General Law, its Regulatory Decree and related legal
provisions and complementary in force or to be enacted, as well as
those provisions relative to social security, professional risks,
employer's and employee's contributions, whilst COMIBOL is totally
exempt of responsibility, and can not be demanded in any lawsuit of
labor nature nor in any civil, penal, tax, fiscal coactive, social
coactive nature, nor administrative, as an result of acts or omissions
resulting from the execution of this CONTRACT by ASC BOLIVIA LDC.
15.2. COMIBOL will deliver ASC BOLIVIA LDC the AREA GRANTED, object of this
CONTRACT free from encumbrance or obligations of labor or legal
character.
SIXTEENTH. - FORCE MAJEURE.
16.1. None of the hiring parties can demand of the other the compliance with
the obligations acquired in this CONTRACT, when the compliance has been
delayed, hindered or impeded by causes not blamed on the obliged party.
Such causes will constitute those of force majoure or fortuitous cases,
as earthquakes, flooding, fire, strikes declared illegal, civil
commotion, factors that can affect transport in general, governmental
prohibitions and catastrophes in general, according to that laid down
by articles 379 and 380 of the Civil Code.
It will also be considered as a force majeure a sustained fall for over
six (6) months in the price of minerals to be produced under the
minimum established by the feasibility study, if and when such
situation causes the stoppage of the extraction of the minerals or
production operations. If these operations continue even under such
market conditions, the force majeure cause will disappear.
16.2. The period during which ASC BOLIVIA LDC will be hindered to normally
comply with this CONTRACT, will be added to the term stated in Clause
Thirteenth.
16.3. Should a force majeure cause happens, ASC BOLIVIA LDC is obliged to
notify COMIBOL within the next five days, describing the nature of the
happening and its effects.
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16.4. The omission of this notice will maintain COMIBOL indemnity in the
regularity of its share in the results and h1 the accounting of the
time period.
16.5. When the force majeure causes are of such nature and magnitude that the
objectives of this CONTRACT and the joint venture in general are
substantially and permanently harmed or are affected in a continuous
manner for more than six months. the hiring parties can agree upon the
temptation of the CONTRACT.
SEVENTEENTH.- ENVIRONMENTAL STANDARDS AND ENVIRONMENTAL MANAGEMENT PLAN
17.1. During the performance of the works and during the life of this
CONTRACT, ASC BOLIVIA LDC will be subject to the environmental
requirements, that is to say, the allowable pollution limits in force
in the country, established by Law No. 1333 dated April Twenty Seventh
nineteen ninety two and the regulations enacted by S.D. 24t76 dated
December nineteen ninety five and other provisions in force or to be
enacted in the future.
17.2. ASC BOLIVIA LDC will draw up the environmental management plan,
starting from an initial audit. in order to avoid or mitigate the
environmental impact, as established by the next Clause 17 4, as well
as the work plan for the execution and closure of activities.
17.3. The environmental management mainly comprises the recovery of the
exploited areas, in order to control the erosion, stabilize the ground
and protect the waters and the atmosphere, perform the treatment of
waste materials and eliminate in a safe manner the tailings, mill
tailings and dumps.
17.4. When ASC BOLIVIA LDC starts its activities, it will determine the
environmental liabilities that could exist in the deposits, object of
this CONTRACT, through the performance of the respective environmental
audit, according to that established in Clause 17.8.1.
17.5. ASC BOLIVIA LDC will be held responsible for the environmental
pollution flows originated in its mining works and through the
accumulation of wastes during the performance of its activities. in
turn, COMIBOL will be responsible for the accumulations and flows
coming from mining works, done prior to this CONTRACT, established in
the environmental audit according to the previous Clause 17.4.
17.6. When ASC BOLIVIA LDC does not comply with that determined in Clause
17.4, it will assume the exclusive responsibility for the flows and
accumulations resulting from the old and new mining works.
17.7. ASC BOLIVIA LDC will pay for damages, to those affected by the
environmental pollution generated by the accumulations and flows coming
from its mining works with an absolute exclusion of COMIBOL.
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17.8. The environmental management, particularly in order to establish the
polluting accumulations and flows. will be controlled by ASC BOLIVIA
LDC in the following manner:
17.8.1. Through the drawing up of an initial environmental audit done
by ASC BOLIVIA LDC, to be done during the first six (6) months
of the Exploitation period. Starting from the audit, ASC
BOLIVIA LDC will prepare, in the next to months, the
environmental management plan.
17.8.2. Should COMIBOL has its own audit and ASC BOLIVIA LDC accepts
it, it will be applicable and ASC BOLIVIA LDC must draw up the
environmental management plan within four (4) months, starting
from the date of the affidavit corresponding to this CONTRACT.
17.8.3. Through environmental audits for the compliance of obligations
and the establishment of responsibilities, resulting from the
environmental management plan, to be done every three years by
specialized companies or entities of national or international
prestige, hired and paid by ASC BOLIVIA LDC.
17.8.4. Through annual reports on the environmental management
prepared by ASC BOLIVIA LDC.
17.8.5. COMIBOL can ask ASC BOLIVIA LDC the environmental information
it considers necessary and can perform on its own the audits
it deems necessary.
17.8.6. The environmental management according to that established in
Point 17.4, comprises the recovery of the exploited areas in
order to reduce and control erosion, stabilize the grounds and
protect the waters and the atmosphere, perform the treatment
of waste materials and eliminate in a safe manner the
tailings, mill tailings and dumps.
17.8.7. The joint venture will not be able to be resolved as long as
the terms given in this Clause are not complied with. On the
other hand, ASC BOLIVIA LDC will continue having the
responsibilities corresponding to its environmental
management, according to the law, once the CONTRACT is
dissolved.
17.8.8. In order to avoid controversies ASC BOLIVIA LDC will timely
and sufficiently inform the representatives of the local
populations, on the aspects related to the protection of the
environment and will try to interest them in the environmental
repair works.
Also, ASC BOLIVIA LDC must comply with the legal requirements
regarding the information to third parties and others that
correspond.
EIGHTEENTH.- NON-EXISTENCE OF SOLIDARITY.
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18.1. It is expressly agreed that the hiring parties do not assume a joint
solidarity of any nature with respect to the obligations contracted by
any of them for the compliance of the obligations resulting from this
CONTRACT, unless that eventually and by free will and in an express
manner any of them assumes such obligations, which will be truly
recorded in a notarized document.
18.2. It is also expressly convened that this document contains all the
agreements, specifications and provisions agreed by the hiring parties,
and none of them will be obliged nor related to the other by any
statement, pledge or verbal or written agreement that is not expressly
incorporated in this CONTRACT.
NINETEENTH -QUALITY OF THE CONCESSIONAIRE.
19.1. According to that laid down by Art. 197 of Law No. 1243 for the
Updating of the Mining Code, ASC BOLIVIA LDC does not acquire property
rights nor a mining concession at all on the soil or underground of the
mining concessions forming part of the AREA GRANTED.
19.2. Nonetheless, COMIBOL grants in favor of ASC BOLIVIA LDC the operational
exclusiveness during the exploration phase as well as during the
construction, installation, starting and exploitation and the annexing
of facilities, equipment, machinery and other complementary assets,
such as constructions, access roads, water and right of way servitudes
uses and customs of the said concessions, understanding as
exclusiveness the fact that during the life of this CONTRACT none of
COMIBOL'S rights on such concessions. servitudes, uses and customs will
be affected, reduced nor impaired in any way, guaranteeing the quiet
and peaceful possession, use and enjoyment of the same, protecting all
the investment and development of ASC BOLIVIA LDC'S activities,
defending such rights against incursions, invasions and other
disturbances by third parties, either they be trade unions,
cooperatives, entities or persons, appealing to the means and resources
given by the laws of the Republic.
TWENTIETH.- COORDINATION, INFORMATION AND SUPERVISION OF THE
JOINT VENTURE.
20.1. ASC BOLIVIA LDC will have under its exclusive and autonomous control
and responsibility the management of all the exploration and
exploitation operations, without any exclusion nor limitation, with the
restrictions established in the laws of the Republic.
20.1. Nonetheless, this Joint Venture Contract will have as coordination,
information and follow-up organization, a COMMITTEE constituted at the
signing of the CONTRACT, that will be composed by four (4) members, two
(2) of them appointed by COMIBOL, and the other two (2) by ASC BOLIVIA
LDC, whose emoluments will be paid by the party appointing them.
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20.3. The COMMITTEE will constitute the main relationship means between
COMIBOL AND ASC BOLIVIA LDC during the life of the CONTRACT. The main
responsibility of the COMMITTEE will be to maintain the best managerial
relations between the parties and to contribute so that any
disagreement, that could come up between them, be discussed and
resolved in a concerted manner.
20.4. The COMMITTEE'S attributions, among others that it will determine. will
be:
a) Approve during its first meetings an internal bylaw that will norm
the COMMITTEE'S activities;
b) Verify the proper compliance of the conditions of this CONTRACT;
c) Create a communications system between ASC BOLIVIA LDC'S managerial
organism and the committee in order to ease the flow of the
relations between both organisms;
d) Formulate the recommendations it considers opportune for the better
compliance of the CONTRACT'S objectives, not meaning that such
recommendations are compulsory for the parties;
e) Gather all the technical, administrative and financial information
in order to conserve it within reach for its inspection and study
by the parties;
f) Recommend the execution of technical audits of the performed
operations by virtue of this CONTRACT, taking care that such audits
at no time hinder or interfere with the operations or impairs asc
bolivia ldc's administrative autonomy. These audits will be paid by
the party requiring them;
g) Periodically formulate the recommendations that are considered
necessary, with relation to the development of ASC BOLIVIA LDC's
operational plans.
TWENTY FIRST.- BOARD OF DIRECTORS.
21.1. Within fifteen days of having signed this CONTRACT, the parties will
organize a BOARD OF DIRECTORS.
21.2. This BOARD OF DIRECTORS will be formed by representatives from both
parties, COMIBOL and ASC BOLIVIA LDC, with equal number of members,
whose emoluments will be paid by the party appointing them.
21.3. The BOARD OF DIRECTORS will meet whenever necessary and called by the
president at his/her own initiative or at the request of the parties.
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21.4. The President of the BOARD OF DIRECTORS will be appointed by the
members of the BOARD OF DIRECTORS at the first ordinary meeting of such
organism.
21.5. The responsibilities of the BOARD OF DIRECTORS are, apart from those it
decides:
21.5.1. To determine the general policies of the joint venture;
21.5.2. To approve the financial statements of the joint venture;
21.5.3. To approve the hire of external independent auditors so they
will submit an opinion on the joint venture's annual financial
statements;
21.5.4. To know and approve the recommendations with regards to the
plans, projects and reports put before them by the COMMITTEE;
21.5.5. The joint venture's BOARD OF DIRECTORS will be the relations
organism between COMIBOL'S board of directors and ASC BOLIVIA
LDCA'S executive organisms, for everything concerning to the
running of the joint venture.
21.5.6. To know the audited financial statements done by external and
independent auditors of optimum quality, at the end of each
fiscal year.
21.6. The BOARD OF DIRECTORS' duties will, at no time, interfere nor impair the
administrative autonomy of ASC BOLIVIA LDC, on the joint venture's
operations during the exploitation stage and marketing of the minerals.
21.7. The BOARD OF DIRECTORS will carry a chronological and circumstantial
minutes of every and all their meetings, and the former will be signed by
those present.
TWENTY SECOND.- TAX AND CONTRIBUTIONS REGIME.
22.1. All the taxes and liens applicable to the mining industry, as well as
those applicable to the import of equipment, machinery, raw materials,
materials and other assets, to the marketing of minerals locally and for
export, in force at the date of the signing of this CONTRACT or that will
be enacted in the future will be exclusively paid by ASC BOLIVIA LDC and
its effects on COMIBOL'S corresponding share will be regulated by that
stated in clause eleventh of this CONTRACT.
22.2. Those taxes applicable to profits each party will obtain from the mining
operation, object of this CONTRACT will be the entire responsibility of
each of them, without any other responsibility for the other party.
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22.3. The contributions to entities of Social Security and Complementary
Funds or similar other ones existing or to be created, are of the
exclusive responsibility and charge of ASC BOLIVIA LDC, with COMIBOL'S
ABSOLUTE EXCLUSION.
TWENTY THIRD.- RESOLVING OF CONFLICTS BETWEEN PARTIES AND
ARBITRATION
23.1. All controversies and claims that could arise between parties with
regards the interpretation or execution of this CONTRACT, will be tried
to resolve them amicably and fast between such parties. in case that
they can not resolve them through mutual negotiations within sixty (60)
days, any of the hiring parties can request the matter under conflict
to be put before an arbitrer.
23.2. In such circumstances, the controversy or interpretation will be
resolved through settlement and/or arbitration according to the
Regulations given by the National Chamber of Commerce's Settlement and
Arbritation Center in La Paz (Bolivia) that, forming part of this
Clause, the parties declare to know and accept. The Center will appoint
the arbitrer from among the members of the Arbitral Body of such
Settlement and Arbitration Center belonging to the aforementioned
Chamber.
23.3. No recourse will proceed against the Arbitrer's resolutions, thus the
parties expressly resign to put it forward.
23.4. The arbitration costs will be paid by the loser in the Arbitral
Decision.
TWENTY FOURTH.- CONTRACT TRANSFERRAL TO A THIRD PARTY.
24.1. This Joint Venture Contract is a result of the award to a proposal
formulated by ASC BOLIVIA LDC to COMIBOL involving the evaluation of
certain technical, financial conditions and of the industrial
capability and competence of the bidder. Nonetheless, ASC BOLIVIA LDC
is empowered to incorporate into the contract's execution one or more
members of known prestige and capability in the mining industry, or in
the investments and financial branch, as well as transfer or subrogate
but only partially their share in the CONTRACT to third parties, but
without this meaning nor representing the total of their rights, share
or obligations resulting from this CONTRACT. To that effect, the
previous conditions stated as follows must be complied with:
24.2. To this effect, it will request the prior and written authorization
from COMIBOL, providing all the details demonstrating the suitability
of the collective or individual persons that are pretended to be
incorporated or those that will partially substitute ASC BOLIVIA LDC'S
participation.
24.3. COMIBOL reserves itself the right to assess the industrial and or
financial sufficiency of the entity or person acquiring or is
subrogated the partial share of ASC BOLIVIA LDC in the CONTRACT, with
the right to veto if that or this does not have the required
20
conditions to the effect, with the sole obligation to give the concrete
and reasonable motives restricting its acceptance. the third parties
that could be incorporated to the joint venture contract, will assume
the obligations, that as members, are stated in this CONTRACT.
24.4. Any modification to the partial participation or share of ASC
BOLIVIA LDC in this contract, by virtue of having obtained it through a
public tender under special conditions, either be the incorporation of
new members, transfer of rights, subrogation of rights or other
contractual forms, the rights and shares corresponding to COMIBOL
stated in this CONTRACT won't be able to be altered, modified, reduced
nor affected.
TWENTY FIFTH.- RESCISSION OF CONTRACT
25.1. During the exploration phases, COMIBOL will be able to rescind the
CONTRACT unilaterally, in the following cases:
25.1.1. Nonfulfillment of the initial payments by ASC BOLIVIA LDC for
each phase, which should be done within the first thirty (30)
days;
25.1.2. Nonfulfillment in executing the work program and minimum
investment pledged by ASC BOLIVIA LDC for the first
exploration phase, in which case the bank guarantee
certificate presented by ASC BOLIVIA LDC to COMIBOL will be
cashed in. and COMIBOL will give notice to ASC BOLIVIA LDC
furnishing the motives.
25.2. In case the contract is terminated for any reason, during the
Exploration Phase, all the improvements made by ASC BOLIVIA LDC in the
areas of the CONTRACT, will stay behind for the benefit of the
concessions, object of the former, without any charge for COMIBOL, with
the exception of the tools, equipment, vehicles, materials and those
facilities liable to be withdrawn that have not been adhered to the
ground, all of which will be able to be freely withdrawn by ASC BOLIVIA
LDC.
All the technical information related to the explored areas, together
with the charts, studies, calculations and complementary details, will
also go as COMIBOL'S property, without any charge to it.
25.3. The CONTRACT can also be terminated due to the following causes:
25.3.1. If the CONTRACT has expired, if it hadn't been extended
according to that laid down in Clause Thirteenth;
25.3.2. By mutual agreement of the hiring parties;
25.3.3. By ASC BOLIVIA LDC'S unilateral decision, when certain
circumstances appear that make unviable the exploitation in
rentable economical conditions.
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25.3.4. When the construction, installation and starting of the
operations exceed Three (3) years since the notification by
ASC BOLIVIA LDC to COMIBOL announcing its exercise of right to
option, unless there are force majeure causes.
25.3.5. When the force majeure causes are produced, such as defined in
Clause Sixteenth of this CONTRACT.
25.4. In case or termination of this CONTRACT for any of the motives stated
in this CONTRACT, either be during the exploration period or in the
exploitation phase, ASC BOLIVIA LDC will be obliged to comply with the
delivery of the studies and other information in the next ninety (90)
days.
TWENTY SIXTH. - EXCLUSION AREA.
26.1. ASC BOLIVIA LDC can not formulate petitions nor perform mining
activities, either by itself or through and intermediary, in an area of
two (2) kilometers from the perimeter of the concession object of this
CONTRACT, unless there is an express authorization from COMIBOL. In any
case, the petition made infringing this prohibition, will be considered
as done for and for COMIBOL'S benefit.
26.2. COMIBOL also won't be able to perform mining activities, either by
itself or through an intermediary, in an exclusion area of one
kilometer from the perimeter of the concessions object of this
CONTRACT, unless the parties agree to the contrary.
TWENTY SEVENTH.- OPTION TO PURCHASE.
27.1. At the definitive closure of operations due to the CONTRACT'S expiry,
ASC BOLIVIA LDC grants COMIBOL the option rights, for a period of
ninety (90) days, for the purchase of its rights and tangible assets of
the joint venture, in equal opportunities as other interested parties.
27.2. COMIBOL and ASC BOLIVIA LDC will appoint an expert appraiser in charge
of establishing the price of the assets, using as basis for the
appraisal, the market value.
27.3. If COMIBOL decides to exercise its option rights, it must notify so of
its decision to ASC BOLIVIA LDC through a notarized letter, within the
term established in Point 27.1.
27.4. The payment of the price will be done within the following sixty (60)
days after the notice provided in the previous point, is given.
TWENTY EIGHT.-CONTRACT'S CONSTITUTIVE DOCUMENTS.
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28.1. Are part of this CONTRACT and will be inserted in the corresponding
Public Deed the following documents.
a) Supreme Decree Xx. 000000 dated February sixteenth nineteen ninety
four.
b) COMIBOL'S board of directors resolution no. 1105 dated February six
nineteen
c) General Administration Power of Attorney conferred to Xx. Xxxxxxx
Xxxxxxx Xxxxxx No. 1-10 awarded in the Notary of Mines in La Paz on
May seventeenth nineteen ninety four.
d) Special Power of Attorney conferred to Lic. Xxxx Xxxxx Xxxxxxx,
registered in the Notary of Mines in La Paz, under No. 205 on July
twenty eight nineteen ninety four.
e) Special Power of Attorney conferred to Mr. Xxxxxx Xxxxxxx Achaval,
registered in the Notary of Mines in La Paz, under No. 105 on April
first nineteen ninety six, registered in the Commerce General
Register, Entry 728, Book 07-0, the same month and year.
f) COMIBOL'S board of directors resolution no. 1229 dated September
twenty seven nineteen ninety six.
g) Pages 5, 9 10 and 11 of ASC BOLIVIA LDC'S proposal.
TWENTY NINTH.-MINING LICENSES.
29.1. During the Exploration Phase, the mining licenses on all the areas
forming part of the mining concessions of the AREA GRANTED will be in
charge of COMIBOL.
29.2. Starting from the date ASC BOLIVIA LDC notifies COMIBOL that it will
make use of its option right, the mining licenses on the areas declared
as positive by ASC BOLIVIA LDC and in which the Exploitation Phase will
be developed, will be paid by ASC BOLIVIA LDC on behalf of COMIBOL and
the receipts will be presented by ASC BOLIVIA LDC to COMIBOL since they
are documents representative of its concessionaire right. this payment
won't be compensated nor reimbursed by COMIBOL nor by the joint venture
and will be done exclusively by ASC BOLIVIA LDC.
THIRTIETH.- OFFICIAL REGISTRATION OF THE CONTRACT.
30.1. The official registration's expenses for this CONTRACT, together with
the ANNEXES and corresponding documents, will be paid by ASC BOLIVIA
LDC, at the Special Notary of Mines in La Paz City
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30.2. ASC BOLIVIA LDC is obliged to present COMIBOL Three (3) Affidavits of
the officially registered CONTRACT, without any charge for COMIBOL,
within sixty (60) days after the writ is signed.
THIRTY FIRST.- CONSENT AND ACCEPTANCE.
31.1. We, XX. XXXXXXX XXXXXXX XXXXXX, PRESIDENT OF THE CORPORACION
MINERA DE BOLIVIA (COMIBOL) and LIC. XXXX XXXXX XXXXXXX, MANAGER
OF THE CONTRACTS AND FINANCE UNIT OF THE CORPORACION MINERA DE
BOLIVIA (COMIBOL), both of full age, neighbors of this city,
with i.d. no. 1191230 pt. and no. 332387 l.p., respectively,
able by right, on one side, and MR. XXXXXX XXXXXXX ACHAVAL, in
representation of ASC BOLIVIA LDC, of full age, neighbor if this
city, with i.d. no. 39745 l.p., ably: by right, give our full
consent and accept every and each of the clauses, terms and
conditions of this CONTRACT, to which we give full validity as
Private Document between parties, whilst it is converted into a
public deed, pledging to a faithful and strict compliance,
subscribing it in La Paz City, on the Twenty first of November
nineteen ninety six.- And you, Special Notary of Mines will add
all the rest of safety and style clauses.
Signed FOR CORPORACION MINERA DE BOLIVIA: Lic. Xxxx Xxxxx Xxxxxxx MANAGER
OF CONTRACTS AND FINANCES. Xx. Xxxxxxx Xxxxxxx Xxxxxx.-
PRESIDENTE.
Signed FOR ASC BOLIVIA LDC: Mr. Xxxxxx Xxxxxxx Achaval AGENT AND PROXY.
Signed.- Xx. Xxxxx Xxxxxxxxxx Xxxxx.- RUC 02199106.- C. Ab. 0157.- LEGAL
ADVISOR COMIBOL. -
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