Exhibit
99.2
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| Execution
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NYRSTAR
CORICANCHA S.A. |
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MINE
CLOSURE AGREEMENT |
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DATED
30 JUNE 2017 |
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AS
AMENDED AND RE-STATED ON 26 JUNE 2020 |
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MINE
CLOSURE AGREEMENT
THIS MINE CLOSURE AGREEMENT
is dated as of the 30th day of June, 2017, as amended and restated on the 26th day of June, 2020.
BETWEEN:
GREAT PANTHER CORICANCHA
X.X.
Xxxxx Xxxxxxx Xxxxxx 235, Oficina 509
Xxxxxxxxxx, 00000 Xxxx
Xxxx
(hereinafter called the “Company”)
And
NYRSTAR INTERNATIONAL X.X.
Xxxxxxxxxxx 0, 0000 XX Budel-Dorplein
The Netherlands
(hereinafter called “Nyrstar International”)
And
NYRSTAR NETHERLANDS (HOLDINGS)
X.X.
Xxxxxxxxxxx 0, 0000 XX Budel-Dorplein
The Netherlands
(hereinafter called “Nyrstar Netherlands”)
(Nyrstar International and
Nyrstar Netherlands hereinafter called “Nyrstar”)
WHEREAS
the Purchaser (as defined herein) entered into the Share Purchase Agreement (as defined herein) with Nyrstar pursuant to which
the Purchaser purchased of all of the shares of the Company from Nyrstar on the terms and conditions of the Share Purchase Agreement
on June 30, 2017.
WHEREAS
it was a condition to the closing of the Purchased Shares under the Share Purchase Agreement that the parties hereto (the
“Parties”) enter into this Mine Closure Agreement to confirm the obligations of the Parties regarding (i) the
Coricancha Mine Closure Plan and related Mine Closure Bond, and (ii) the related guarantee and indemnification obligations of
the Parties.
WHEREAS
the Parties have entered into a Letter Agreement (as defined herein) pursuant to which the Parties have agreed to amend and
restate the terms of this Mine Closure Agreement on the terms and conditions set forth herein with effect as of the 26th day of
June, 2020.
NOW
THEREFORE THIS AGREEMENT WITNESSES that in consideration of the promises, the mutual covenants and agreements contained herein
and of other good and valuable consideration (the receipt and sufficiency whereof are hereby acknowledged), the parties hereto
agree as follows:
The
following capitalised terms used in this Agreement have the following meanings:
“Agreement”
means this Mine Closure Agreement, as amended and restated to reflect the terms and conditions set forth herein;
“Coricancha
Mine Closure Plan” means the mine closure plan for the Coricancha Mine Complex in effect as at the date of this Agreement,
approved by Directorate Resolution No. 035-2010-MEM-AAM/MPC/RPP, amended by Directorate Resolution No. 219-2012-MEM-AAM and by
Directorate Resolution No. 429-2014-MEM/DGAAM, as amended from time to time in order to comply with any Applicable Law or direction
or order of a Governmental Body;
“GPS”
means Great Panther Silver Limited, a company incorporated under the laws of the Province of British Columbia, Canada;
“Letter
Agreement” means the letter agreement dated the ____ day of June, 2020 among the Company, Nyrstar, the Purchaser and
GPS, as the parties to the Share Purchase Agreement, pursuant to which this Agreement has been amended and restated and the Share
Purchase Agreement has been amended;
“Mine
Closure Bond” means a mine closure guarantee letter for the Coricancha Mine Complex issued by BBVA Banco Continental,
or such other Peruvian bank determined by the party which is obliged by this Agreement to procure such a letter, in favour of
the Ministerio de Energia y Minas of Peru;
“Mine
Closure Bond Period” means the period of five years from the date of this Agreement expiring June 30, 2022;
“Parties”
means the Company, Nyrstar Netherlands and Nyrstar International, and “Party” means any one of them as the context
requires;
“Purchaser”
means Great Panther Silver Peru S.A.C, a company incorporated under the laws of Peru;
“Share
Purchase Agreement” means the share purchase agreement dated December 19, 2016, as amended and restated on June 9, 2017
and as further amended on June 28, 2017, between the Company, Nyrstar, the Purchaser and GPS, and as further amended by the Letter
Agreement; and
“US$”
means the lawful currency of the United States of America.
Capitalized
terms used in this Agreement but not defined herein will have the meaning prescribed to them in the Share Purchase Agreement.
| 2. | Mine Closure
Bond and Liabilities |
| (a) | This Agreement
is subject to, and will only have effect from, Completion occurring in accordance with
the Share Purchase Agreement. |
| (b) | Subject
to clause 3, the Parties agree that the Mine Closure Bond will be maintained during the
Mine Closure Bond Period as follows: |
| (i) | Nyrstar
will cause BBVA Banco Continental, or such other Peruvian bank as determined by Nyrstar
from time to time, to issue the Mine Closure Bond in the following amount (the “Nyrstar
Bond Amount”): |
| (A) | in the
period on and from 30 June 2017 to 30 June 2020, US$9,737,429 or such lesser amount required
by Ministerio de Energia y Minas of Peru (or such other Peruvian Government Authority
having jurisdiction); |
| (B) | in the
period on and from 1 July 2020 to 30 June 2021, US$7,000,000; and |
| (C) | in the
period on and from 1 July 2021 to 30 June 2022, US$6,500,000; and |
| (D) | in the
period on and from 1 July 2022, no amount. |
| (ii) | The
Company will cause a Peruvian bank as determined by the Company from time to time, to
issue the Mine Closure Bond in the following amount (“Great Panther Bond Amount”)
for each period of 12 months in the Mine Closure Bond Period, commencing from Completion,
such that aggregate of the Mine Closure Bonds referred to in paragraph (i) and this paragraph
(ii) equals to the total amount of the Mine Closure Bond required by the Ministerio de
Energia y Minas of Peru or such other Peruvian Government Authority having jurisdiction
from time to time. The Great Panther Bond Amount will be calculated as follows from time
to time during the balance of Mine Closure Period following the execution of the Letter
Agreement: |
| (A) | in the
period from 30 June 2017 to 30 June 2020, such amount which exceeds US$9,737,429 (as
required by the Ministerio de Energia y Minas of Peru or such other Peruvian Government
Authority having jurisdiction); |
| (B) | in the
period from 1 July 2020 to 30 June 2021, such amount which exceeds US$7,000,000 (as required
by the Ministerio de Energia y Minas of Peru or such other Peruvian Government Authority
having jurisdiction); |
| (C) | in the
period from 1 July 2021 to 30 June 2022, such amount which exceeds US$6,500,000 (as required
by the Ministerio de Energia y Minas of Peru or such other Peruvian Government Authority
having jurisdiction); and |
| (D) | in the
period on and from 1 July 2022, the entire amount as required by the Ministerio de Energia
y Minas of Peru or such other Peruvian Government Authority having jurisdiction. |
| (iii) | the
Company may comply with its obligations under paragraph (ii) by supplementing the Mine
Closure Bond organised by Nyrstar from time to time; |
| (iv) | each
Mine Closure Bond will be in a form required by and otherwise comply with all requirements
imposed by the Ministerio de Energia y Minas of Peru (or such other Peruvian Government
Authority having jurisdiction); |
| (v) | neither
Party will take any action that would reasonably be expected to cause the Ministerio
de Energia y Minas of Peru (or such other Peruvian Government Authority having jurisdiction)
to unnecessarily increase the amount of the Mine Closure Bond, other than to the extent
such action is required to comply with Applicable Law or to discharge the obligations
of the Party under this Agreement; |
| (vi) | the
responsibility for providing security in support of the Mine Closure Bond in each year
of the Mine Closure Bond Period will be allocated as follows: |
| (A) | Nyrstar
will be responsible, at its expense, for providing security for the amount of the Mine
Closure Bond equal to the Nyrstar Bond Amount; and |
| (B) | the Company
will be responsible, at its expense, for providing security for the amount of the Mine
Closure Bond in an amount equal to the Great Panther Bond Amount; |
| (vii) | the
maximum amount of the Mine Closure Bond to be provided by Nyrstar under this paragraph
(a) will be US$9,737,429 in
the period from 30 June 2017 to 30 June 2020; |
| (viii) | without
limiting Nyrstar’s rights under paragraph (c) below, in the event that Ministerio
de Energia y Minas of Peru (or such other Peruvian Government Authority having jurisdiction)
issues a resolution, or takes such other action, confirming that the Coricancha Mine
Closure Plan has been completed such that the Company is no longer required to maintain
the Mine Closure Bond, each Party will be entitled to the release of the security granted
by the Party in favour of the bank that has issued the Mine Closure Bond then in effect; |
| (ix) | in
the event that Ministerio de Energia y Minas of Peru (or such other Peruvian Government
Authority having jurisdiction) issues a resolution, or takes such other action, that
orders foreclosure or payout of the Mine Closure Bond such that the bank that has issued
Mine Closure Bond pays out on the Mine Closure Bond, then the following will apply: |
| (A) | if the
full amount of the Mine Closure Bond is paid out, each Party will be responsible between
themselves for the liability to the relevant bank in proportion to the amount of the
security provided in support of the Mine Closure Bond pursuant to this Agreement; and |
| (B) | if less
than the full amount of the Mine Closure Bond is paid out, Nyrstar will be responsible
to its bank for all amounts up to the relevant Nyrstar Bond Amount and the Company and
will be responsible to its bank for any excess. |
| (c) | In the
event that the Company makes a final, irrevocable decision to permanently close the Coricancha
Mine Complex during the Mine Closure Bond Period, the following provisions will apply: |
| (i) | subject
to clause 2(e) below, the Company will give notice in writing to Nyrstar promptly after
making a final, irrevocable decision to permanently close the Coricancha Mine Complex; |
| (ii) | within
30 days of receipt of the above notice, Nyrstar shall pay to the Company the amount of
the relevant Nyrstar Bond Amount, in full and final release of its obligations under
the Mine Closure Bond (the ‘Closure Contribution’); |
| (iii) | immediately
after Nyrstar pays the Closure Contribution, the Company will take all steps necessary
to establish a Mine Closure Bond in the amount of the relevant Nyrstar Bond Amount (without
prejudice to any Mine Closure Bond which it has already procured under this Agreement),
and will give Nyrstar notice when it has done so; |
| (iv) | following
receipt of notice referred to in paragraph (iii), Nyrstar will take all necessary steps
to terminate the Mine Closure Bond that it had previously procured (in the amount of
the relevant Nyrstar Bond Amount); |
| (v) | the
Company and Nyrstar will notify the Ministerio de Energia y Minas of Peru of the steps
above (when they occur) so that such Ministry understands, at any given point in time,
who is responsible for relevant Mine Closure Bonds; |
| (vi) | should
the costs of closing the Coricancha Mine Complex be less than the Closure Contribution
paid by Nyrstar to the Company, the Company shall promptly refund Nyrstar the difference; |
| (vii) | the
Company will be responsible for any closure costs in excess of the Closure Contribution; |
| (viii) | the
Company will proceed with the Coricancha Mine Closure Plan, as it may be amended from
time to time by the Company and as required by Applicable Law or by a direction or order
of a Governmental Body; |
| (ix) | the
Company will take reasonable commercial efforts to complete the Coricancha Mine Closure
Plan as expeditiously as possible, with full consideration of engineering and Government
Approval requirements and the impact of events beyond the reasonable control of the Company; |
| (x) | the
Company will take reasonable steps to minimize the cost of the completion of the Coricancha
Mine Closure Plan, provided that Nyrstar acknowledges that the Company will be entitled
to follow accepted engineering practices in determining the manner in which the work
required to complete the Coricancha Mine Closure Plan is carried out; |
| (xi) | Nyrstar
will not be responsible for taking any steps to comply with (and, if necessary, carry
out) the Coricancha Mine Closure Plan, or amending that plan from time to time; |
| (xii) | the
Company will not use the Closure Contribution to pay amounts connected with: |
| (A) | liability
for injury, death or property damage suffered or incurred in connection with the Coricancha
Mine Closure Plan; |
| (B) | regulatory
fines or sanctions incurred by the Company in connection with works connected with the
Coricancha Mine Closure Plan, other than to the extent that such fines relate to the
period prior to Closing; |
| (C) | the Company’s
overhead costs; |
| (D) | costs
which are incurred, or for which the Company otherwise becomes liable, as a consequence
of an act or omission after Completion of the Company or a Related Body Corporate; or |
| (E) | costs
which are incurred, or for which the Company otherwise becomes liable, as a consequence
of not undertaking works in accordance with the Coricancha Mine Closure Plan, as such
plans may be amended from time-to-time by the Company and as required by Applicable Law
or by a direction or order of a Governmental Body that may apply to their reclamation;
and |
| (xiii) | Nyrstar
will have no liability or obligation to reimburse the Company for costs of completion
of the Coricancha Mine Closure Plan that are in excess of the relevant Nyrstar Bond Amount. |
| (d) | In the
event that the Company does not make a final, irrevocable decision to permanently close
the Coricancha Mine Complex during the Mine Closure Bond Period, the following provisions
will apply: |
| (i) | the
Company will make arrangements for the release of the obligations of Nyrstar under its
Mine Closure Bond, which arrangements will be in effect upon expiry of the Mine Closure
Bond Period; and |
| (ii) | following
the expiry of the Mine Closure Bond Period, Nyrstar and any party guaranteeing the obligations
of Nyrstar under its Mine Closure Bond will have no further responsibility or liability
in connection with the Mine Closure Bond or, subject to clause 3 of this Agreement, the
closure of the Coricancha Mine Complex. |
| (e) | Notwithstanding
anything herein, the Company may not exercise its rights to give notice in writing to
Nyrstar of its final, irrevocable decision to permanently close the Coricancha Mine Complex
at any time prior to July 1, 2021; |
| (f) | The Company
agrees during the period following the date of execution of the Letter Agreement to the
date of expiry of the Mine Closure Bond Period to provide a quarterly written report
on its plans for Coricancha within 45 days of the expiry of each quarter, commencing
with the quarter ended June 30, 2020; |
| (g) | As consideration
for Nyrstar extending its obligations to fund the Nyrstar Bond Amount beyond June 30,
2020, the Company will pay to Nyrstar the following amounts on account of interest on
the relevant Nyrstar Bond Amount calculated and paid as follows: |
| (i) | interest
will be calculated based on an interest rate equal to USD 3 month LIBOR (or such alternative
reference rate as generally accepted or designated by the appropriate monetary authorities
as a replacement for USD 3 month LIBOR) plus 5% per annum; |
| (ii) | interest
will be calculated and payable on the actual outstanding amount of the Nyrstar Bond Amount
from July 1, 2020 to the earlier of the date of release or payout of the Mine Closure
Bond and the expiry of the Mine Closure Bond Period; |
| (iii) | interest
will be calculated and paid quarterly by the Company to Nyrstar within 15 calendar days
after the expiry of each quarter (with any period less than a quarter calculated on a
pro rata basis and paid to Nyrstar within 15 calendar days after the end of that period);
and |
| (iv) | the
initial interest period will be from July 1, 2020 to September 30, 2020, with successive
quarters following from such dates. |
| (a) | This Agreement
may be terminated upon completion of a “Third Party Sale” as contemplated
by clause 18(f)(i) of the Share Purchase Agreement. |
| (b) | Upon termination
of this agreement in accordance with paragraph (a) above: |
| (i) | the
provisions of this Agreement will cease to have effect except for the following provisions: |
| A. | Clause 1 – Defined Terms |
| B. | This clause 3 – Termination |
| C. | Clause 5 – Interpretation |
| D. | Clause 6 – Time of Essence |
| E. | Clause 7 – Headings; |
| F. | Clause 8 – Governing Law |
| G. | Clause 9 – Notices |
| H. | Clause 10 – Entire Agreement; |
| I. | Clause 11 – Amendments and Waivers; |
| J. | Clause 12 – Currency; |
| K. | Clause 13 – Assignment; |
| L. | Clause 14 – Language; |
| M. | Clause 15 – Enurement; |
| N. | Clause 17 – Delivery by fax or e-mail; |
| (ii) | each
Party retains the rights it has against the others in respect of any breach of this Agreement
occurring before termination. |
The
Parties hereto covenant and agree to execute and deliver such further agreements, documents and writings and provide such further
assurances as may be required by the parties to give effect to this Agreement and, in particular, to do all acts and things, execute
and deliver all documents, agreements and writings and provide such assurances, undertakings, information and investment letters,
as may be required from time to time by all regulatory or Governmental Bodies having jurisdiction over the Company’s affairs,
or, as may be required from time to time under applicable legislation and the respective regulations thereunder.
Whenever
used in this Agreement, words importing the singular number only shall include the plural and vice versa and words importing the
masculine gender shall include the feminine gender.
Time
shall in all respects be of the essence of this Agreement.
The
division of this Agreement into clauses is for convenience and reference only and shall not affect the interpretation hereof.
This
Agreement shall be governed by and construed in accordance with the laws of England and Wales and the Parties hereby attorn to
the non-exclusive jurisdiction of the courts of England and Wales.
| (a) | All notices
and other communications between the Parties under this Agreement shall be in writing
and be deemed to have been given if delivered personally, sent by ordinary first class
mail (postage prepaid) or sent by facsimile to the parties at the following addresses,
facsimile numbers (or at such other address, facsimile number for such Party as shall
be specified in like notice): |
| (i) | if to
the Company, to the address or facsimile number of the Company provided on the first
page of this Agreement; and |
X/x
Xxxxxxx Xxxxx & Xxxxxxxxx XX
X/x Xxxxxxx Xxxxxxxxxxx (Holdings) X.X.
Xxxxxxxxxxx 0
0000 XX Xxxxx-Xxxxxxxx
Xxx Xxxxxxxxxxx
| (x) | Any notice
or other communication given personally shall be deemed to have been given and received
upon delivery, any notice or other communication given by mail shall be deemed to have
been given and received on the third Business Day after it is mailed and any notice or
other communication given by facsimile shall be deemed to have been given and received
on the first Business Day after it is sent. |
| (c) | In the
event of any disruption, strike or interruption in the applicable postal service after
mailing and before receipt or deemed receipt of a document, that document will be deemed
to have been received on the seventh day following full resumption of the postal service. |
| (d) | The Company
may change its address by giving written notice of such change to Nyrstar, and Nyrstar
may change its address by giving written notice thereof to the Company. |
Subject
to the Transaction Documents and the Letter Agreement, this Agreement sets forth the entire agreement among the Parties hereto
pertaining to the specific subject matter hereof and supersedes all prior agreements, understandings, negotiations and discussions,
whether oral or written of the Parties hereto, and there are no warranties, representations or other agreements between the Parties
hereto in connection with the subject matter hereof except as specifically set forth herein.
| 11. | Amendments
and waivers |
| (a) | No supplement,
modification or amendment of this Agreement shall be binding unless executed in writing
by each Party. |
| (b) | A provision
of this Agreement may not be waived except by an instrument in writing signed by the
Parties affected thereby. Any waiver of this Agreement shall apply only to the subject
matter of the written waiver and no consent or waiver by a Party in respect of any breach
or non-performance by the other of its obligations, hereunder will be deemed or construed
to be consent to, or a waiver of, any other breach or non-performance. |
| (c) | This Agreement
continues in full, force and effect on the terms and conditions set forth herein following
its amendment and restatement pursuant to the Letter Agreement and without modification
and amendment other than as set forth herein. |
All
references in this Agreement to US$ are to the currency of the United States of America.
This
Agreement is non-assignable by any Party.
The
Parties hereto have expressly required that this document as well as all documents pertaining thereto be drafted in the English
language only.
This
Agreement shall be binding upon and shall enure to the benefit of the Parties and their respective heirs, executors, administrators
and successors.
This
Agreement may be executed in counterparts, each of which shall constitute an original and all of which taken together shall constitute
one and the same instrument.
| 17. | Delivery
by facsimile or email |
Any
delivery of an executed copy of this Agreement by way of facsimile or email shall constitute delivery hereof, provided that any
Party delivering by way of facsimile or email shall, as soon as reasonably practicable, deliver the original executed copy to
the other Parties.
[Signature
Page to Follow]
Signed
as an agreement
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NYRSTAR
INTERNATIONAL B.V. |
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Per: |
Xxxx
Xxxxxxxxx” / “Xxxxx Xxxxxxx” |
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Title: Directors |
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Date: 26 June 2020 |
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NYRSTAR
NETHERLANDS (HOLDINGS) B.V. |
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Per: |
Xxxx
Xxxxxxxxx” / “Xxxxx Xxxxxxx” |
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Title: Directors |
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Date: 26 June 2020 |
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GREAT PANTHER CORICANCHA
S.A.
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| Per: |
“Xxx
Xxxxx” |
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Authorised Signatory
Date: 26 June 2020
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| Per: |
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Authorised
Signatory |
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