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Exhibit 3g
CO-OPERATION AGREEMENT
FOR MINERAL EXPLORATION AND DEVELOPMENT
THIS AGREEMENT is executed and effective as of the 27th day of May, 1996
BETWEEN:
BUREAU OF GEOLOGY AND MINERAL RESOURCES
OF XINJIANG UYGUR AUTONOMOUS REGION
a provincial bureau of Ministry of Geology and Mineral Resources of
China (referred to herein as "MGMR-XINJIANG")
Address: Xx. 0 Xxxxxx Xxxx Xxxx, Xxxxxx, Xxxxxxxx, Xxxxx
AND:
MINCO MINING & METALS CORPORATION
a corporation incorporated under the laws of British Columbia
(referred to herein as "MINCO")
Address: 0000-000 X. Xxxxxxx Xx., Xxxxxxxxx, XX
Xxxxxx X0X 0X0
WHEREAS:
1. MGMR-XINJIANG has various kinds and degrees of interests in certain
mineral properties in Xinjiang Uygur Autonomous Region, the People's
Republic of China;
2. MGMR-XINJIANG and MINCO (the "Parties") wish to enter into negotiations
regarding a possible joint venture agreement (a "JOINT VENTURE
CONTRACT") under which both MGMR-XINJIANG and MINCO would operate a
co-operative joint venture enterprise (the "JOINT VENTURE") to explore,
develop and produce such properties;
3. Pursuant to the appropriate laws and regulations of the People's
Republic of China, after extensive discussions and negotiations on the
basis of equality and mutual benefit, the Parties to this co-operation
agreement (the "CO-OPERATION AGREEMENT") agree to form a co-operative
joint venture under which the parties will each use their respective
advantages including mineral resources, capital, and technology, to
explore, develop, and produce certain mineral properties (as such
properties are defined below);
4. MGMR-XINJIANG and MINCO are willing to enter into this Co-operation
Agreement on the basis of the premises set out above and on the
terms set out below.
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NOW THEREFORE, in consideration of the premises set out above, and the mutual
promises set out below, the Parties have agreed and do hereby agree as
follows:
1.0 OBJECTIVES OF THE JOINT VENTURE
The Parties agree to form a co-operative joint venture constituted as a
separate legal person in accordance with the Law of the PRC on
Sino-Foreign Co-operative Joint Venture Enterprises and other relevant
laws and regulations. The objectives of the Joint Venture are to jointly
explore, develop and produce mineral resources using an integrated
mining company model which combines exploration, development, and
production. The Parties will each use their respective advantages
including mineral resources, capital, and technology, to explore,
develop, and produce certain mineral properties.
2.0 PROPERTIES FOR THE JOINT VENTURE
The Parties agree that the properties (the "Properties") for the joint
Venture are the areas defined in Schedule A.
3.0 CONTRIBUTION TO THE JOINT VENTURE
3.1 MGMR-XINJIANG
In consideration for its equity participation, MGMR-XINJIANG shall
contribute to the Joint Venture the following assets: (1) the
Properties; (2) the exploration permits of the Properties; (3) the data
and results which has been collected or created to date on the
Properties.
3.2 MINCO
In consideration for its equity participation, MINCO shall contribute to
the joint Venture the following assets: (1) certain advanced equipment
and technology for mineral exploration development and production; and
(2) capital.
4.0 EQUITY INTERESTS
After the establishment of the Joint Venture and the assessment of the
contribution made by MGMR-XINJIANG in terms of existing exploration
results, data, and the Properties, MINCO will provide all funds for the
risky exploration activities on the Properties until the completion of a
feasibility study (the "Feasibility Study") on one commercial mineral
deposit on the Properties (the "MINCO's Earn-In Period"). During MINCO's
Earn-In Period, MGMR-XINJIANG would not make capital
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contributions to the Joint Venture and MINCO's equity interest will be
calculated based on its contributions to the Joint Venture using
international standard earn-in formula, and MINCO can earn a maximum of
76 percent equity interests in the joint Venture, while MGMR-XINJIANG's
equity interest in the Joint Venture will not be less than 24 percent.
After taking the rights and interests of each Party into consideration,
all the capital required during development and production phases after
the Feasibility Study will be contributed 19 percent by MGMR-XINJIANG
and 81 percent by MINCO in order to maintain the equity interests of 76
percent for MINCO and 24 percent for MGMR-XINJIANG in the Joint Venture.
The net profits of the Joint Venture will be shared in accordance with
the respective equity interests of each of the Parties after both
Parties recover their investments in the Joint Venture.
5.0 OPERATION AND MANAGEMENT OF THE JOINT VENTURE
The Joint Venture will be managed and operated in accordance with the
Law of the PRC on Sino-Foreign Co-operative Joint Venture enterprises
and other relevant Chinese laws and regulations as well as sound
internationally accepted policies, standards and practices.
The Joint Venture will be managed by a board of directors which will
possess the highest authority over the operation and management of the
Joint Venture. Each Party will appoint a number of directors and MINCO
will has a majority position on the board of directors of the Joint
Venture.
6.0 FORM AND DURATION OF THE JOINT VENTURE
6.1 FORM
The Parties agree that the form of the Joint Venture is a Co-operative
joint venture constituted as a separate legal person.
6.2 TERM
The term of the Joint Venture shall commence on the date on which the
Joint Venture is established and shall continue for a period of thirty
(30) years such period to be extendible upon mutual agreement between
the Parties.
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7.0 - UNDERTAKINGS LEADING TOWARDS A JOINT VENTURE CONTRACT
In order to complete the Joint Venture Contract as soon as possible, the
Parties agree to undertake the following activities as set out below:
1. After the execution of this Co-operation Agreement, MGMR-XINJIANG will
provide the Joint Venture and MINCO with all available data (the
"Data") on the Properties. A list of the Data is attached as Schedule
B to this Co-operation Agreement.
2. Upon receiving the Data set out above, MINCO will assess the
exploration and investment potential of the Properties in a timely
fashion and will then confirm to MGMR-XINJIANG the level of their
interest in the Properties.
3. MINCO will conduct site visits to the Properties in a timely fashion
to finalize the areas for co-operation. MGMR-XINJIANG will provide to
MINCO all reasonable and necessary assistance.
4. As soon as possible after executing this Co-operation Agreement,
MGMR-XINJIANG will obtain approval from the appropriate Chinese
government authorities to allow MGMR-XINJIANG and MINCO to enter the
Joint Venture Contract and to form the Joint Venture (the "Government
Approval"). MGMR-XINJIANG will exercise its best efforts to seek the
Government Approval. MINCO will provide to MGMR-XINJIANG all
reasonable assistance.
5. Upon receiving the Government Approval in respect of the Properties,
the Parties will appoint an independent evaluator to assess the
contributions made by each of the Parties to the proposed Joint
Venture, including particularly, but not limited to, the exploration
permits, the previous exploration work, and data collected and created
by MGMR-XINJIANG.
6. After completing the assessment of the contributions as set out above,
the Parties will negotiate a full and final Joint Venture Contract in
good faith to set up all the details for the Joint Venture.
7. Upon entering into the Joint Venture Contract in respect of the
Properties, the Parties will conduct an exploration, development, and
production program.
8.0 - EXCLUSIVE NEGOTIATION AND INVESTMENT RIGHT
Upon execution of this Co-operation Agreement, MGMR-XINJIANG grants and
guarantees MINCO an exclusive right to negotiate and enter into a Joint
Venture Contract and to invest in the Properties defined in Schedule A. If,
after further exploration work, MINCO decides not to participate further
with respect to one or more of such Properties, MINCO shall notify
MGMR-XINJIANG in writing of such decision and MGMR-XINJIANG can then enter
into a joint venture agreement with any
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third party with respect to any such Properties thereby released upon
receiving such notice.
9.0 - CONFIDENTIALITY OBLIGATIONS
9.1 MGMR-XINJIANG
MGMR-XINJIANG agrees to preserve the confidentiality of all information
obtained pursuant to this Co-operation Agreement (including, without
limitation, any documents evidencing agreements between the Parties) and
not to disclose such information other than in accordance with the terms of
this Co-operation Agreement excluding those Chinese government bodies which
have a rights to know.
9.2 MINCO
MINCO agrees to preserve the confidentiality of all information obtained
pursuant to this Co-operation Agreement (including, without limitation, any
documents evidencing agreements between the Parties) and not to disclose
such information other than in accordance with the terms of this
Co-operation Agreement. However, MINCO can disclose such information to
regulatory authorities including, without limitation, Canadian government
bodies, securities commissions and stock exchanges, to meet the disclosure
requirement of such regulatory authorities.
10.0 ASSIGNMENT
MGMR-XINJIANG agrees that MINCO can assign this Co-operation Agreement to
its associated companies, for example, subsidiaries and parent companies.
In addition, MINCO will have rights to invite other non-Chinese companies
to invest in the Properties. MINCO will form one single legal entity with
its non-Chinese joint venture partners to enter the Joint Venture with
MGMR-XINJIANG. Similarly, MGMR-XINJIANG will have the right to invite other
Chinese companies (but, for greater certainty, not any non-Chinese
companies) to invest in the Properties. MGMR-XINJIANG will form one single
legal entity with its Chinese joint venture partners to enter the Joint
Venture with MINCO.
11.0 GENERAL
11.1 GUARANTEE DEPOSIT
MINCO agrees to pay MGMR-XINJIANG US$50,000.00 as a guarantee deposit (the
"Guarantee Deposit") for the Data provided by MGMR-XINJIANG on the
Properties before MINCO can use the Data. The Guarantee Deposit will be
fully refunded to MINCO ounce exploration work is carried out on one of the
Properties. If no exploration work is carried out on any of the Properties,
the Guarantee Deposit will be non-refundable.
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11.2 LANGUAGE
This Co-operation Agreement is written in duplicate in both Chinese and
English, with both texts having equal authority.
11.3 COUNTERPARTS
This Co-operation Agreement, and any notices or other documents permitted
or required by it, may be executed in counterparts, including copies which
have been executed and then delivered by facsimile transmission.
IN WITNESS WHEREOF the Parties have duly executed this Co-operation Agreement
as of the date and year first above written.
BUREAU OF GEOLOGY AND MINERAL RESOURCES
OF XINJIANG UYGUR AUTONOMOUS REGION
Per: __________________
Tian Jianrong
Title: Vice Director
MINCO MINING & METALS CORPORATION
Per: _________________
Xxx X. Xxx
Title: President & Chief Executive Officer
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SCHEDULE B
LIST OF THE DATA
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Re: Amendments to Appendix A of the Agreement between Minco Canada and Xinjiang
Bureau of Geology and Mineral Resources on May 27.
Following the initial study of the geological information, engineers from
Minco Canada have made some revisions to the selected areas of exploration in
Appendix A of the Agreement on May 27.
Kushitai Region (N O 3)
(I) N: 42 degrees 19 feet 00 inches (J) N: 42 degrees 26 feet 00 inches
E: 81 degrees 05 feet 00 inches E: 82 degrees 00 feet 00 inches
(K) N: 42 degrees 36 feet 00 inches (L) N: 42 degrees 41 feet 00 inches
E: 82 degrees 00 feet 00 inches E: 82 degrees 45 feet 00 inches
(M) N: 43 degrees 13 feet 00 inches (N) N: 42 degrees 45 feet 00 inches
E: 82 degrees 45 feet 00 inches E: 81 degrees 05 feet 00 inches
Aikendaban Region (N O 4)
(O) N: 43 degrees 47 feet 00 inches (P) N: 43 degrees 00 feet 00 inches
E: 84 degrees 00 feet 00 inches E: 86 degrees 00 feet 00 inches
(Q) N: 43 degrees 00 feet 00 inches (R) N: 43 degrees 20 feet 00 inches
E: 84 degrees 00 feet 00 inches E: 86 degrees 00 feet 00 inches
Vulansayi Region (N O 5)
(S) N: 42 degrees 00 feet 00 inches (T) N: 42 degrees 00 feet 00 inches
E: 84 degrees 45 feet 00 inches E: 86 degrees 00 feet 00 inches
(U) N: 42 degrees 37 feet 00 inches (V) N: 42 degrees 57 feet 00 inches
E: 86 degrees 00 feet 00 inches E: 84 degrees 41 feet 00 inches
(W) N: 42 degrees 37 feet 00 inches (X) N: 42 degrees 25 feet 00 inches
E: 84 degrees 00 feet 00 inches E: 84 degrees 45 feet 00 inches
Saluntai Region (Additional)
(1) N: 43 degrees 00 feet 00 inches (2) N: 43 degrees 00 feet 00 inches
E: 86 degrees 00 feet 00 inches E: 86 degrees 30 feet 00 inches
(3) N: 42 degrees 40 feet 00 inches (4) N: 42 degrees 40 feet 00 inches
E: 86 degrees 00 feet 00 inches E: 86 degrees 30 feet 00 inches
Unrevised parts will be executed according to the Appendix of the original
Agreement.
/s/
Xinjiang Bureau of Geology &
Mineral Resources Minco Canada
