Section 1: DEFINITIONS

In this Agreement, the following expressions shall, unless a contrary intention appears, have the following meanings, that is to say: "Additional Mining Lease" means a mining lease and dredging licence granted to the Company pursuant to Clause 2(d) hereof, including any new lease granted to the Company upon the expiry of the original; "Associated Minerals" means zircon, monazite, columbite, graphite and garnet when occurring in the same deposit with titanium bearing minerals; "commencement of mining operations" means the date of employment of the dredge, wet plant and land plants on mining operations, provided that the Company promptly furnishes to the Director of Mines notification to that effect; "Effective Date" means date of coming into force of this agreement pursuant to clause 12 (3).; "Financial Year" means the Company's fiscal year ending December 31 of each calendar year. "Group Office Expenses" means any expenditure incurred or reimbursed by the Company in maintaining an overseas office of the Company; "Immigration Fees" means any fees or other taxes payable under the Non-citizens (Registration, Immigration and Expulsion) Act, 1965; "Lease" means a Mining Lease or an Additional Mining Lease, as applicable; 6 **No. 4** *Sierra Rutile Agreement (Ratification) Act* **2002** "marketing commissions and fees" means charges in respect of the promotion, solicitation of orders for and negotiation of the terms and conditions of sales of the Company's products, and charges in respect of shipping arrangements including insurance and other incidental matters; 'Minerals Act" means the Mines and Minerals Act, 1994 (Act No. 5 of 1994); "minerals concentrates" means the mixture of titanium-bearing minerals and associated minerals from which a major portion of the sand, gravel and other materials has been removed; "Mining" means any operations for winning or obtaining minerals, including dredging, "Mining Lease Area" means the lands for the time being comprised in the Mining Lease and in the Additional Mining Leases, "Mining Leases" means the mining leases and dredging licences granted to the Company in accordance with Clause 2 hereof. "Minister" means the Minister for Mineral Resources; "payroll taxes" means any Taxes payable under the Payroll Tax Act, 1972; "Prospecting Area" means the lands for the time being comprised in any Prospecting Licence; "Prospecting Licence" means a special exclusive prospecting licence granted to the Company pursuant to Clause 3 hereof; "public body" means the State, its agencies and authorities and any legal body whose functions are laid down by legislation or other mandate of the State (including another Public Body and regional or local authorities) or that depends upon the authority of the State for: (a) the appointment of its members; (b) the observance of the obligations arising out of its measures; or **No. 4** *Sierra Rutile Agreement (Ratification) Act* **2002** 7 (c) the collection of revenue which it is empowered to collect, provided that any such body shall be regarded as a public body notwithstanding that it is not part of the administrative set-up of the State. "Refurbishment Works" means the restoration and rehabilitation of the Company's mining operations and construction in progress in Sierra Leone to their condition as on 19th January, 1995 including but not limited to the replacement or repair of mining machinery, plant and equipment, infrastructure (including, without limitation, buildings and site improvements) consumable mining and other stores and assets. "State" means the present, past and future government or other governing authority of Sierra Leone, including regional or local authorities or any other public body. "taxes" means all and any taxes, royalties, duties, excise, charges, levies, fees, dues, contributions, payments or other impositions of any kind whatsoever payable to, or at the direction of, any public body. "titanium-bearing minerals" means ilmenite, rutile and other minerals containing titanium. "ton" means metric tonne. "turnover' means in respect of a year of assessment the value of the total gross receipts or amounts receivable in money or money's worth which give rise to business income for the year of assessment— (a) reduced by that part of the gross receipts for the year of assessment or a previous year of assessment that are bad debt claims; and (b) increased by any amounts recovered in respect of bad debt claims that arose in previous years of assessment. as defined by Section 2 of the Income Tax Act, 2000 (Act No. 8 of 2000). 8 **No. 4** *Sierra Rutile Agreement (Ratification) Act* **2002** References herein to Public Body, entities, statutes, regulations and other pronouncements shall include their respective successors thereof and substitutions therefore. **2.** THE MINING LEASE (a) APPLICATION OF MINERALS ACT The provisions of the Minerals Act relating to mining leases and dredging licences shall apply to the Mining Leases and Additional Mining Leases except to the extent that they are inconsistent with the express or any implied terms and conditions of this Agreement, in which event the provisions of this Agreement shall prevail. (b) TERM AND RENEWAL The term of each of the Mining Leases shall commence as of the date of its grant by the Government and shall cease at the expiration of thirty-three (33) years from the date of commencement of mining operations as defined in this Agreement; provided that the Company shall have the right to terminate the same at any time by not less than six (6) months prior notice in writing to the Government to that effect; and provided also that if a Mining Lease shall not earlier have been terminated under this paragraph, the Company may, by giving at least six (6) months notice in writing to the Government prior to the expiration of the period of such Lease, request the Government to grant it a new Mining Lease for a further minimum term of fifteen (15) years from the date of expiration of the original Lease term, upon the terms and conditions of the original Lease (other than the terms relating to payments by the Company or to renewal). Upon any such request, provided the Company is not then in default hereunder, the Company shall be entitled to the grant of a new Mining Lease for a further minimum term of fifteen (15) years upon such fair and equitable terms as to payment by the Company as may then be agreed upon, or failing agreement, as shall be settled by arbitration in accordance with the provisions of Clause 11(i) hereof. The Minister is hereby authorized and empowered to grant further extensions of the term of each Mining Lease in the event that the Company's ability to enjoy the full benefits thereof is adversely affected by any *force majeure.* **No. 4** *Sierra Rutile Agreement (Ratification) Act* **2002** 9 (c) SURRENDER (1) The Company may surrender any part or parts but not all of the Mining Lease Area included in a Mining Lease or an Additional Mining Lease at any time during the term of such 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 such Lease. (2) Upon the surrender, expiration, or other termination of a Mining Lease or Additional Mining Lease, or of any portion thereof, the Company shall be granted a period of not less than two (2) years, or such longer period as the Director of Mines may specify, immediately following such surrender, expiration or termination in which to remove all or any of its buildings, structures, plants, 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 Company's buildings, structures, plants, machinery or effects which are not removed in accordance with the provisions of this paragraph within the period stated herein, or such longer period as the Director of Mines may specify, shall at the expiration of such period become the property of the Government. Nothing contained in this paragraph shall prejudice the right of the Government to take possession of any building, plant, machinery or other effects which are the property of the Company and which on the expiration, surrender or other termination of any Lease are left upon the area of such Lease if the Company is knowingly in default in payments due to the Government in respect of such Lease. (d) ADDITIONAL MINING LEASES At any time and from time to time while a Prospecting Licence is in effect, the Company may request and shall be granted an Additional Mining Lease for titanium-bearing and associated minerals covering such areas within a Prospecting Area included in a Prospecting Licence as the Company 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 Mining Leases granted pursuant to the provisions of this paragraph shall be upon terms and conditions provided herein with respect to the Mining Leases, except that the term of each Additional Mining Lease shall cease at the expiration of twenty-five (25) years from the date of commencement of mining operations as defined in this Agreement. 10 **No. 4** *Sierra Rutile Agreement (Ratification) Act* **2002** (e) INDEMNIFICATION The Government shall for claims arising during the term of the Mining Lease and Additional Mining Leases indemnify the Company against such claims by owners or occupiers (including the Chiefdom Councillors) in respect of the Mining Lease Area other than claims for compensation made in accordance with the provisions of Section 26 of the Minerals Act but subject to Clause 10(b) of this Agreement. (f) OTHER MINERALS (1) Although the Mining Leases and Additional Mining Leases are to be confined to titanium-bearing and associated minerals and the Company's mining operations will be directed toward the extraction and recovery thereof, the parties recognise that mining operations such as the Company plans to conduct will of necessity turn up along with titanium-bearing and associated minerals, other minerals or metals that may be intermixed with or in close proximity thereto. (2) (i) If any diamonds are recovered by the Company, they shall be delivered by the Company 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 Company as the Government deems proper, making such distribution of the proceeds derived therefrom as the Government considers fair and equitable. Except with respect to diamonds, the Company shall have the right to extract, recover, process and sell any such other minerals and metals which it extracts with titanium-bearing and associated minerals in its mining operations. It is expressly understood, however, that the Company will be governed by, and will comply with, all valid and 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 radioactive minerals, and will pay any valid taxes or other government charges assessed against any such minerals and metals paid by other producers thereof including any royalty so assessed. No. 4 Sierra Rutile Agreement (Ratification) Act 2002 11 (ii) 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 metals and the Company agrees to pay a royalty so assessed. (3) (i) At any time during the period of a Prospecting Licence, the Company shall upon written request to the Director of Mines be entitled to the grant of a Mining Lease for any minerals or metals other than diamonds and titanium-bearing or associated minerals, the presence of which have been proven to be in commercial quantities by the Company's prospecting activities including any water and/or other rights as granted in this Agreement or easements required in connection therewith in respect of any lands within a Prospecting Area, provided that such minerals or metals are not then subject to any active mining right or lease, or other conflicting property interest granted by the Government to another and that the grant will not conflict with Government's policy on mining which policy shall not be discriminating against the Company. (ii) Any such Leases shall be granted under terms and conditions which shall be fair and reasonable at the time. Any dispute as to the terms and conditions upon which any such Leases shall be granted shall be referred to arbitration in accordance with Clause 11(i) of this Agreement.