Section 5: MINING LEASE AND DREDGING LICENCE

(a) At any time during the life of the Licence the Companies shall be entitled to the grant of a mining lease and dredging licence (hereinafter called the lease), covering all titanium-bearing and associated minerals in and under any portion of the Prospecting Areas, as described in the Companies' said request. The provisions of the Minerals Act relating to the mining leases and dredging licences shall apply to the Lease except to the extent inconsistent with the special provisions incorporated in this Agreement under the authority granted the Minister by Section 42 of the Minerals Act. A 146 No. 21 Bayer Preussag Agreement 1973 (Ratification) 1974 (b) The term of the Lease shall commence as of the date of its grant by the Government and shall at the expiration of 25 years from the date of commencement of mining operations as defined in this Agreement; provided that the Companies shall have the right to terminate the same at any time by not less than six (6) months notice in writing to the Government to that effect; and provided also that if the Lease shall not earlier have been terminated under this paragraph (b) the Companies may by at least six (6) months' previous notice in writing to the Government, given prior to the expiration of the period of the Lease, request the Government to grant them a new lease for a further minimum term of 10 years from the date of expiration of the first Lease period upon the terms and conditions of the original Lease (other than the terms relating to payments by the Companies or to renewal of the Lease). U,pon any such request, provided the Companies are not then in default hereunder the Companies shall be entitled to the grant of such new lease for a further minimum term of ten years upon such fair and equitable terms as to payment by the Companies as may then be agreed upon, or failing agreement, as shall be settled by arbitration in accordance with the provisions of clause 10 (c) hereof. (c) The Companies may surrender any part or parts, but not all, of the Mining Areas at any time during the term of the Lease by notice in writing to the Government to that effect and upon such surrender the lands surrendered shall cease to be comprised in or subject to the provisions of the Lease. (d) The Government shall during the term of the Lease indemnify the Companies against all claims of any owners or occupiers (including Chiefdom Councillors) in respect of the Mining Areas other than claims for compensation made in accordance with the provisions of the Minerals Act but subject to Clause 9 (b) of the Agreement. (e) Upon the surrender or other termination of the Lease or of any other lease granted hereunder, or of any portion thereof, the Companies shall be granted period of not less than two (2) years, or such longer period as the Director of Mines may specify, immediately following such expiration or termination in which to remove all or any of their buildings, structures, plant, machinery equipment (including dredges, barges and tow boats) or other effects from the areas covered by the Lease or portion of the Lease surrendered or terminated. Any of the Companies' buildings, structures, plant, machinery or effects which are not removed in accordance with the provisions of this paragraph (e) within the period stated herein, or such longer periods as the Director of Mines may specify, shall at the expiration of such period become the property of the Government. Nothing in this paragraph (e) contained shall prejudice the right of the Government under section 40 (2) of the Minerals Act to take possession of any building, plant, machinery or other effects which are the property of the Companies and which on the expiration, surrender or other termination of any lease are left upon the area of such lease if the Companies are knowingly in default in payments due to the Government in respect of such lease. No. 21 Bayer Preussag Agreement 1973 (Ratification) 1974 A 147 (f) At any time and from time to time while the Licence is in effect, the Companies shall request and shall be entitled to the grant of additional mining leases for titanium-bearing minerals covering such areas within the Prospecting Areas as the Companies may designate by filing with the Director of Mines a map of the areas selected together with a descriptive statement setting forth in general terms the approximate boundaries and area thereof. All such additional leases granted pursuant to the provisions of this paragraph (f) shall be upon terms and conditions provided herein with respect to the Lease granted pursuant to Paragraph (a) of this Clause 5, except that, upon the expiration of 25 years from the date of commencement of mining operations for titanium-bearing minerals or mineral concentrates the Government may require that the terms of any such additional mining leases as may then be in effect or as may be thereafter granted, insofar as they relate to payments by the Companies, be redetermined in the manner provided in paragraph (b) of this Clause 5 for determining terms as to payments by the Companies that will be applicable during the renewal term of the Lease. (g) Although the lease is to be confined to titanium-bearing and associated minerals, and the Companies mining operations will be directed toward the extraction and recovery thereof, the parties recognize that dredging operations such as the Companies plan to conduct will of necessity turn up along with titanium-bearing and associated minerals any other minerals or metals that may be intermixed with or in close proximity to the titanium-bearing and associated minerals. If any diamonds are recovered by the Companies they shall be delivered by the Companies to the Director of Mines or to such other Government Agency or Depository as the Director of Mines shall designate for such purpose. The Government shall have the right to make such disposition of any diamonds so delivered by the Companies as the Government deems proper, making such distributions of the proceeds derived therefrom as the Government considers fair and equitable. Except with respect to diamonds, the Companies shall have the right to extract, recover, process and sell any such other minerals and metals which they dredge up with titanium-bearing and associated minerals in their mining operations. It is expressly understood, however, that the Companies will be governed by and will comply with all applicable Acts, rules and regulations governing the possession and marketing of any such other minerals and metals, including any applicable Acts, rules or regulations relating to radio-active minerals and will pay any valid taxes or other governmental charges assessed against and paid by other producers thereof, including any royalty. If no royalty is established in the Minerals Act for any such other mineral or metal other than diamonds surrendered to the Government the Government reserves the right to establish a royalty payable therefor that shall be consistent with the royalties payable for comparable minerals or metal and the Companies agree to pay a royalty hereunder. A 148 No. 21 Bayer Preussag Agreement 1973 (Ratification) 1974