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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10
GENERAL FORM FOR REGISTRATION OF SECURITIES
PURSUANT TO SECTION 12(B) OR 12(G) OF THE
SECURITIES EXCHANGE ACT OF 1934
NEVADA MANHATTAN MINING INCORPORATED
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(Exact Name of Registrant as Specified in Its Charter)
NEVADA 88-0219765
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(State or Other Jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification No.)
5038 NORTH PARKWAY CALABASAS, SUITE 100
CALABASAS, CALIFORNIA 91302
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(Address of Principal Executive Offices) (Zip Code)
(818) 591-4400
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(Registrant's Telephone Number, Including Area Code)
Securities to be registered pursuant to Section 12(b) of the Act:
Common Stock
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(Title of Class)
Preferred Stock
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(Title of Class)
Securities to be registered pursuant to Section 12(g) of the Act:
None
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CROSS-REFERENCE SHEET BETWEEN
REGISTRATION STATEMENT
AND ITEMS OF FORM 10
<TABLE>
<CAPTION>
FORM 10 ITEM NUMBER AND CAPTION CAPTION IN INFORMATION STATEMENT
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<S> <C>
1. Business.............................. Business; The Company's Business and Properties, Risk Factors and
Special Material Considerations; Management's Discussion of and
Analysis of Financial Conditions and Results of Operations
2. Financial Information................. Selected Financial Data; Management's Discussion and Analysis of
Financial Condition and Results of Operations; Financial Statements
3. Properties............................ The Company's Business and Properties; Risk Factors and Special
Material Considerations
4. Security Ownership of Certain
Beneficial Owners and Management.... Security Ownership of Certain Beneficial Owners and Management
5. Directors and Executive Officers...... Management
6. Executive Compensation................ Executive Compensation
7. Certain Relationships
and Related Transactions............ The Company's Business and Properties
8. Legal Proceedings..................... Legal Proceedings
9. Market Price of and Dividends on the
Registrant's Common Equity and
Related Stockholder Matters......... Market Price of and Dividends on Company Equity; Management;
Executive Compensation
10. Recent Sales of Unregistered
Securities.......................... Risk Factors and Special Material Consideration
11. Description of Registrant's
Securities to be Registered......... Description of Securities Being Registered
12. Indemnification of Directors
and Officers........................ Management
13. Financial Statements and
Supplementary Data.................. Financial Statements and Supplementary Data
14. Changes in and Disagreements with
Accountants on Accounting and
Financial Disclosure................ Not Applicable
15. Financial Statements and Exhibits..... Financial Statements and Exhibits
</TABLE>
<PAGE> 3
TABLE OF CONTENTS
Page
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The Company . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Selected Financial Data . . . . . . . . . . . . . . . . . . . . . . 1
The Company's Business and Properties . . . . . . . . . . . . . . . 1
Risk Factors and Special Material Considerations . . . . . . . . . 9
Management's Discussion and Analysis of Financial
Condition and Results of Operations . . . . . . . . . . . . . . . 17
Security Ownership of Certain Beneficial Owners and Management. . . 18
Management . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
Executive Compensation . . . . . . . . . . . . . . . . . . . . . . 24
Legal Proceedings . . . . . . . . . . . . . . . . . . . . . . . . . 26
Market Price of and Dividends on Company's Equity . . . . . . . . . 27
Description of Securities Being Registered . . . . . . . . . . . . 28
Financial Statements and Supplementary Data . . . . . . . . . . . . 31
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1. THE COMPANY
Nevada Manhattan Mining Incorporated (the "Company") was formed on June
10, 1985, in the state of Nevada under the name of Epic Enterprises, Ltd. On
September 11, 1987, the Company amended its Articles of Incorporation changing
its name to Nevada Manhattan Mining Incorporated. The Company's articles
currently authorize the issuance of 49,750,000 shares of Common Stock with a par
value of one cent ($.01) per share and 250,000 shares of Series A Preferred
Stock with a par value of $1.00 per share (the "Preferred Stock") convertible
into Common Stock on the terms and conditions described elsewhere in this
Registration Statement. There were 12,208,412 shares of the Company's Common
Stock and 228,919 shares of the Preferred Stock issued and outstanding as of
February 28, 1997. The average price per share paid for the Common Stock issued
directly by the Company has been approximately $2.00 per share. Holders of the
Preferred Stock have paid $10.00 per share with an effective purchase price for
the Common Stock (after giving effect to the conversion thereof on a one-for-ten
basis) of $1.00 per share.
The Company was formed primarily to develop the Nevada Property, other gold
mining properties which it had previously owned, and certain gold mining
properties which it has recently acquired. Pursuant to prior action of both the
Company's directors and its shareholders, certain gold mining properties have
been abandoned. The Company has recently acquired the rights to seven (7) gold
mining concessions and three (3) coal mining concessions in Indonesia, as well
as three (3) timber properties in Brazil.
It is the Company's present intention over the next twelve (12) months to
increase production at the Nevada Property pursuant to the Nevada Business Plan
(as herein defined); increase the production of sawed lumber and other wood
products at its facilities located on one or more of its Brazilian timber
properties; conduct further mining, surveying, mapping and exploration
activities on certain of its gold and coal mining concessions located in
Indonesia (including the Sopang and Silobat Properties); and seek prospective
joint venture partners capable of jointly developing its coal concessions in
Indonesia. The Company has budgeted $1,500,000 for further development of the
Nevada Property, approximately $1,500,000 for current exploration activities in
Indonesia, and projects that revenues generated from operations in Brazil will
be sufficient to pay all operating costs in Brazil. The funds necessary for the
activities currently contemplated on the Nevada Property and a substantial
portion of activities on the Indonesian gold and coal mining concessions noted
above are projected to come from one or more of the following sources: a private
placement to a qualified institutional buyer (within the meaning of Rule 144A)
or accredited investor; a direct public offering made pursuant to a registration
statement filed under the Securities Act of 1933, as amended; or from cash flow
generated from the Brazilian operations.
The Company has its principal executive offices at 5038 North Parkway
Calabasas, Suite 100, Calabasas, California 91302. Its telephone number is (818)
591-4400 and its facsimile number is (818) 591-4411.
The Company has recently formed two subsidiaries to conduct its overseas
operations: Kalimantan Resources, Ltd., and Equatorial Resources, Ltd. Both of
these subsidiaries are corporations organized under the laws of the British
Virgin Islands. Kalimantan Resources is wholly owned by the Company while
Equatorial Resources is owned 80% by the Company and 20% by Ignatius Z.
Theodorou.
Management of the Company presently consists of a five-member board of
directors (two of which are neither executive officers nor employees) and
employs two (2) full-time executive officers as well as seven (7) full-time
employees at its principal offices. The Company's subsidiary, Equatorial
Resources, Ltd., also employs 62 persons with respect to current operations on
the Brazilian timber concessions. In 1989, the Company formed a Shareholder
Advisory Committee (the "Advisory Committee") comprised of up to 12 outside
shareholders. The purpose of the Advisory Committee is to participate in
directors' meetings and compensation meetings, as well as planning meetings
related to all aspects of corporate development. Members are selected annually
from a group of shareholders who respond to Company inquiries regarding interest
in participating on the Advisory Committee. Membership is rotated annually. One
of the primary purposes of this Committee is to provide independent, shareholder
participation in critical decisions relating to overall corporate strategy.
The Company has contracted with Harrison Western Mining and
Construction, Lakeland, Colorado, to supply labor, service, materials and
equipment for Nevada property operations. The Company has also entered into
agreements with: Gold King Mines Corporation to provide mining consulting
services with respect to the Nevada Property; Behre Dolbear & Company, Inc., to
provide oversight and third-party validation services relative to the
exploration and development activities on the Indonesian Concessions; Eco-Rating
International, Inc., to provide an economic and environmental evaluation of the
Company's Brazilian Timber Properties; and Thyssen Sudamerica N.V. to market and
sell all timber harvested and milled by the Company with respect to the
Brazilian Timber Concession.
2. SELECTED FINANCIAL DATA
The following table sets forth certain historical financial data for the Company
for fiscal years 1992 through 1996 and the nine-month periods ended February 28,
1997 and 1996. The historical financial data for the three years ended May 31,
1996 (audited), and the nine months ended February 28, 1997 and 1996
(unaudited), were derived from the financial statements of the Company included
elsewhere herein. The summary historical combined financial data for the years
ended May 28, 1992 and 1993 have not been audited and were derived from the
accounting records of the Company. In the opinion of management, the historical
financial data of the Company as of and for the years ended May 31, 1992 and
1993, and as of and for the nine months ended February 29, 1997 and 1996,
include all adjusting entries (consisting only of normal recurring adjustments)
necessary to present fairly the information set forth therein. The historical
financial data are not necessarily indicative of the results of operations for
any future period. Furthermore, the results of operations for the nine months
ended February 28, 1997 and 1996 should not be regarded as indicative of the
results that may be expected for the full year.
<TABLE>
<CAPTION>
Years Ended May 31,
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1996 1995 1994 1993 1992
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(unaudited)
<S> <C> <C> <C> <C> <C>
Expenses:
Costs and expenses of
development stage activities $ 1,198,506 $ 611,073 $ 480,473 $ 503,061 $ 389,933
----------- ---------- ---------- ---------- ----------
Net loss (1,198,506) (611,073) (480,473) (664,244) (389,933)
Cumulative preferred dividends (10,600) -- -- -- --
----------- ---------- ---------- ---------- ----------
Net loss attributable to
common shareholders $(1,209,106) $ (611,073) $ (480,473) $ (664,244) $ (389,933)
=========== ========== ========== ========== ==========
Net loss per common share $ (0.16) $ (0.12) $ (0.15) $ (.23) $ (.18)
=========== ========== ========== ========== ==========
Weighted average
shares outstanding 7,428,081 5,021,801 3,146,727 2,885,062 2,183,616
=========== ========== ========== ========== ==========
Balance Sheet Data:
Total assets $ 4,199,803 $3,711,865 $3,651,286 $3,324,098 $5,574,429
Long-term debt 115,723 105,919 143,209 131,947 2,375,000
Stockholders' equity 3,633,553 3,081,334 1,800,234 1,305,238 1,870,180
</TABLE>
<TABLE>
<CAPTION>
Nine Months Ended
February 28,
1997 1996
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(unaudited)
<S> <C> <C>
Expenses:
Costs and expenses of development
stage activities $ 1,319,759 $ 468,453
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Net loss (1,319,759) (468,453)
Cumulative preferred dividends (136,063) --
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Net loss attributable to
common shareholders $(1,455,822) $(468,453)
=========== ==========
Net loss per common share $ (0.14) $ (0.07)
=========== ===========
Weighted average shares outstanding 10,405,727 6,414,837
=========== ===========
Balance Sheet Data:
Total assets $10,729,816 $3,824,408
Long-term debt 100,266 58,412
Stockholders' equity 9,862,768 3,214,081
</TABLE>
3. THE COMPANY'S BUSINESS AND PROPERTIES
The Company's business is the exploration and mining of precious metals and
coal in Nevada and Indonesia and the harvesting of timber and other wood
products in Brazil. To this end the Company has recently acquired the right to
conduct exploration activities on three (3) coal properties in Indonesia and the
right to develop and/or own three (3) timber properties located in the state of
Para, Brazil. The Company holds various rights in and to the following
properties: (i) twenty-eight (28) patented and sixty-five (65) unpatented claims
aggregating approximately 1,800 acres (the "Nevada Property") which are located
near the town of Manhattan, Nevada (approximately 45 miles northeast of Tonopah,
Nevada); (ii) seven (7) gold concessions aggregating 39,400 hectares (98,500
acres) which are located in both the gold belt area of Kalimantan, Indonesia,
and on the island of Sumatra (see "Indonesian Gold Concessions"); (iii) three
(3) coal properties located in Kalimantan, Indonesia, comprising 290,000
hectares (725,000 acres) (the "Indonesian Coal Concessions"); and (iv) three (3)
timber properties aggregating 693,000 hectares which are located in the state of
Para, Brazil (the "Brazilian Timber Properties"). A more thorough description of
the properties is contained within portions of this Section of the Registration
Statement entitled "The Nevada Property," "The Indonesian Concessions" and "The
Brazilian Timber Properties."
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The Nevada Property
The Nevada Property consists of twenty-eight (28) patented and sixty-five
(65) unpatented claims aggregating approximately 1,800 acres.
The Company originally acquired its rights to the Nevada Property pursuant
to a mining agreement dated April 4, 1987 (the "Nevada Property Agreement")
with Anthony C. Selig and related entities (the "Selig Entities"). On December
9, 1987, the Selig Entities and the Company entered into an amendment to the
Nevada Property Agreement reducing both the area of interest and the purchase
price of the Nevada Property from Two Million One Hundred Thousand Dollars
($2,100,000) to Six Hundred Thousand Dollars ($600,000) and modifying, amongst
other things, the schedule of semiannual payments due from the Company to the
Selig Entities in consideration of the purchase of the Nevada Property.
On March 2, 1989, the Company entered into an agreement entitled "Manhattan
Mining Property Agreement" with Argus Resources, Inc., a Nevada corporation, and
Argus Mines, Inc., a Nevada corporation (the "Argus Companies"); and the Selig
Entities (the "Nevada Property Agreement"). This agreement was entered into
after a dispute had arisen between Argus Resources, Inc., and the Selig Entities
under the lease/purchase
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agreement which had been previously entered into between such parties and which
originally formed the basis upon which the Company derived its rights to the
Property. This agreement also modified certain terms and conditions contained
within the Nevada Property Agreement.
Under the terms of the Nevada Property Agreement, as amended, the Company
was required to pay, and did pay, to the other parties the sum of Twenty-Five
Thousand Dollars ($25,000) upon execution of the agreement. The Company also
agreed to pay the Argus Companies the additional sum of One Hundred Sixty-Five
Thousand Dollars ($165,000) in monthly installments of Seven Thousand Five
Hundred Dollars ($7,500) commencing on April 15, 1989, and continuing thereafter
until the entire sum was paid in full. The Nevada Property Agreement, as
amended, further required the Company to issue 1,000,000 (pre-reverse split)
shares of Common Stock as additional consideration to Argus Resources, Inc. In
fact, the Company paid the Argus Companies, Inc., and the Selig Entities all
amounts due under the Nevada Property Agreement, as amended, and issued 100,000
(post-reverse split) shares of Common Stock to Argus Resources, Inc.
Pursuant to the terms and conditions of the Nevada Property Agreement, as
amended, the Argus Companies executed a Corporation Quitclaim Deed conveying a
forty percent (40%) undivided interest in the Nevada Property to the Company on
March 9, 1989. Concurrently therewith, the Company delivered a Deed of Trust and
Assignment of Rents (the "Deed of Trust") to the Selig Entities to further
secure the obligations under the Nevada Property Agreement. Both the Corporation
Quitclaim Deed and the Deed of Trust were duly recorded in the office of the
county records by and for Nye County, Nevada.
In June 1993, the Company entered into a Joint Venture Agreement with
Marlowe Harvey/Maran Holdings, Inc. ("Marlowe Harvey"); Argus Resources, Inc.;
and the Selig Entities respecting the Nevada Property. Under the terms of the
Joint Venture Agreement, Marlowe Harvey was entitled to a fifty-one percent
(51%) interest in the Nevada Property in consideration of Marlowe Harvey
assuming certain obligations, including the purchase of the Deed of Trust from
the Selig Entities. The remaining forty-nine percent (49%) interest in the
Nevada Property was to be held equally by Argus Resources, Inc., and the Company
in consideration of their payment of their pro rata share of all amounts due
under the promissory note (the "Nevada Note") secured by the Deed of Trust
created by the Nevada Property Agreement, as amended. The failure of either
Argus Resources, Inc., or the Company to pay any amounts due under the note
during the first year of the joint venture was to be deemed a default requiring
the defaulting party to quitclaim its interest in the Nevada Property to the
remaining parties. The Argus Companies, Marlowe Harvey and the Company were also
responsible for their pro rata share of all property development expenses. At
the time, Marlowe Harvey was the operator of the Nevada Property and responsible
for all operations relating to maintaining the Nevada Property in accordance
with the Mining Agreement.
On October 20, 1995, the Company and Mr. Harvey "as an individual and for
Maran Holdings and Argus Resources" executed an agreement (the "Amended Joint
Venture Agreement") which purports to amend the June 1993 Joint Venture
Agreement. The Amended Joint Venture Agreement obligates Marlowe Harvey to
convey to the Company within ten (10) days of the date of execution of such
Agreement fifty-two percent (52%) of the outstanding and issued stock in Argus
Resources, Inc.("Argus"), in exchange for the payment of One Hundred Forty-Seven
Thousand Dollars ($147,000) to be paid in the future from a percentage of Argus'
share of the net proceeds realized from the sale of gold production on the
Nevada Property. In addition, Marlowe Harvey agreed to convey a one percent (1%)
interest in the Nevada Property to the "management" of the Company (Messrs.
Michaels and Kramer) in exchange for a "production payment" of Forty-Seven
Thousand Dollars ($47,000) likewise to be paid from future production
attributable to Argus Resources, Inc. It was, and is, the intention of the
Company's officers to convey their rights under the Amended Joint Venture
Agreement to the Company in exchange for the Company's assumption of such
officers' obligations under such Agreement.
Both the obligations of the Company and its officers under the Amended
Joint Venture Agreement were to be secured by the pledge of Common Stock (in the
case of the Company, 1,235,429 shares) with "piggyback" registration rights to
be granted to Marlowe Harvey in two (2) years in the event $147,000 is not paid
from production by that time. If only a portion of the production payment is
made by October 20, 1997, the obligation to seek registration was to be ratably
reduced. The Company was further required to issue 1,186,981
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shares of its Common Stock to Maran Holdings, Inc., an affiliate of Argus, at
the time at which it was obligated to issue to Argus the shares to be used as
security for the production payment.
The Amended Joint Venture Agreement also required both the Company and its
joint venture partners to each make one-half of the property tax payments and
the payments due to the Selig Entities under the Nevada Property Agreement. Both
of these payments are due in January of each year.
In January 1996, the Company notified Marlowe Harvey that it had been
"ready, willing, and able" to convey the Common Stock pursuant to the terms of
the Amended Joint Venture Agreement. In addition, the Company made all of the
required property tax payments relating to the Nevada Property and the payments
due to the Selig Entities in reliance upon the terms of the Amended Joint
Venture Agreement. Marlowe Harvey has failed to reimburse the Company for its
one-half share of the property tax payments and the payments due to the Selig
Entities which were advanced on its behalf by the Company and has failed to make
the conveyances required by the terms and conditions of the Amended Joint
Venture Agreement. As a result, the Company instituted an action in Nye County,
Nevada, on November 4, 1996, seeking specific performance and damages against
Marlowe Harvey; Maran Holdings Inc.; Calais Resources Inc.; and Argus Resources,
Inc. This action is described in further detail under the Section of this
Registration Statement entitled "LEGAL PROCEEDINGS." Regardless of the outcome
of this action, the Company will continue to operate this property and believes
it will continue to own the interest in the Nevada Property which it acquired by
virtue of the previous agreements it entered into which relate to the Nevada
Property.
In March 1997, the Company entered into a Sale and Purchase Agreement with
the Selig Entities. Under the terms of this latest agreement, the Selig Entities
agreed to sell to the Company one hundred percent (100%) of their interests in
the Nevada Note, the Deed of Trust, and the Nevada Property for the sum of Three
Hundred Seventy Five Thousand Dollars ($375,000) payable as follows: One Hundred
Thousand Dollars ($100,000) in March 1997 and the balance plus all accrued and
unpaid interest (calculated at the rate of 5.25%) on or before February 6, 1999.
The Company in fact paid the first installment of One Hundred Thousand Dollars
($100,000) in March 1997. The agreement also acknowledges that the Company is
the only person or entity legally entitled to conduct mineral operations on the
Nevada Property. The Company is also required to pay all U.S. Bureau of Land
Management annual maintenance fees associated with the claims comprising the
Nevada Property.
The Nevada Property is located in an historic mining district which has
experienced mining operations from 1866 to the present with the major activity
in the late 1860s, between 1906 and 1921 and from 1960 to the present. Placer
and lode mining took place principally in the Reliance Mine, the White Caps
Mine, the Union Amalgamated Mine, the Manhattan Consolidated Mine, the Earle
Mine, the Big Four Mine and the April Fool Mine. The United States Geological
Survey reports historic production through 1959 of 260,000 ounces of lode gold
and 206,000 ounces of placer gold mined in the Manhattan Mining District. Since
1959, the more significant gold production has occurred from the Echo Bay and
Nevada Gold Fields mines which border the Nevada Property. Such mines have
yielded production in excess of 500,000 ounces of gold.
The Nevada Property lies in several shallow gullies in a general area which
is located between 7,500 to 7,800 feet in elevation. Mineralization of the
Nevada Property appears to be structurally controlled by a series of parallel
east-northeast trending faults dipping from 50 to 75 degrees southwest and with
some cross or perpendicular faults. The Nevada Property consists of two distinct
areas which require different mining and production techniques. Gold
mineralization in the vicinity of "Litigation Hill" is near the surface and much
less expensive to mine. The lower grade ore can be "leached" while higher grades
of ore must be milled. Gold mineralization located in the White Caps Mine has
revealed two delineated ore bodies below the 600-foot level and a deeper
exploration target requiring substantially higher costs for extraction as
compared to "Litigation Hill." "Dewatering" the mine and driving a decline to
the 800-foot level could become quite costly. Additionally, gold ore obtained
from the White Caps Mine may be required to be processed using autoclave
technology or other proven methods in order to comply with environmental
regulations due to the ore's high content of antimony, mercury, arsenic and
sulphur; nevertheless, the Company believes that the deep ore bodies located
within the White Caps Mine may have sufficient potential to justify the large
development program. Both the "Litigation Hill" and White Caps Mine areas of the
Property will be discussed below.
The Nevada Property is adjacent to three (3) existing gold mines.
Immediately adjacent to the west of the Nevada Property is the Manhattan Mine
formerly owned by Echo Bay Minerals Company now a part of the Smokey Valley
Combined Operation. This mine has produced approximately 500,000 ounces of gold
over the last 10 to 15 years. Operations at this mine have been suspended.
Immediately to the south of the Nevada Property is the Keystone Mine which
was developed by Nevada Gold Fields Company. Proven reserves were reported at
100,000 tons of gold ore averaging .21 ounces per ton. Probable reserves were
reported at an additional 100,000 tons.
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Approximately 14 miles to the north of the Property are the Smokey Valley
Combined Operation mining activities known as the Round Mountain Mine. This mine
is currently the largest producer of gold ore in the district with production
estimated at more than 350,000 ounces of gold per year and 7,000,000 ounces in
reserve and is one of the largest heap leach operations in the world.
The White Caps Mine was historically one of the more prolific gold mines in
the state of Nevada and is located in the Manhattan Mining District. Production
of gold began in 1911 and remained in production until 1935 when the vein was
lost and the lower levels of the mine encountered water. A total of 120,000
ounces of gold were produced during that period. The mine was closed in 1942 by
executive order relating to all "mining activities non-essential to the [World
War II] effort."
The mine was found to be flooded from its deepest point at the 1,300-foot
level to the 450-foot level. Beginning in 1957, a $400,000 program was put in
place to "dewater", renovate and reactivate the mine. Pumping of water began
that year and by 1958, the water level was down to the 800-foot level. At that
time some exploration resumed at the upper levels of the mine. At the 300-foot
level, antimony-mercury ore grading 60 percent and 8 percent, respectively, was
discovered.
An expensive antimony deposit (also containing gold and mercury values) was
located near the 500-foot level and plans were made to begin mining activities
after the renovation of the mine was completed. While continuing to explore for
gold mineralization on the lower levels of the mine, the owners leased out the
right to mine antimony-gold-mercury ore above the 600-foot levels in 1962 and
production thereafter began.
A diamond drilling program in 1962 relocated the gold ore vein which had
been lost in 1935 when it faulted out at the 600-foot level. Drilling of the
formation began at the head of the winze (i.e. incline shaft) and continued down
to the 1,200-foot level. Eight regularly-spaced holes of approximately 100 feet
in length were drilled. These holes revealed a gold mineralized area 65 feet
wide with values ranging as high as 7.7 ounces per ton and averages over .8
ounces per ton. This mineralization is found in the foot wall of the old winze.
The next phase of the 1962 drilling program consisted of diamond drilling a
"hole" starting at the 1,200-foot level. Six holes of approximately 100 feet in
length each were drilled and revealed gold values averaging over 3 ounces per
ton with a high of 6 ounces per ton. This drilling program blocked out a proven
ore reserve of over 14,000 ounces of gold according to a 1964 report published
by the California Mining Journal. The program also indicated that an ore body
containing several hundred thousand ounces of gold is present in the relocated
vein which runs from the 600-foot level down to the 800-foot level and from the
1,200-foot level down to at least the 1,300-foot level.
Before production could begin, a fire was accidentally started by a pumping
subcontractor at the 300-foot level. The ore bins, shaft and head frame were
destroyed and the mine was closed in 1964. The low price of gold (then $35 per
ounce), high costs to rebuild the damaged mine and the lack of funds caused the
White Caps Mine to close in 1964 and has remained closed since that time. The
Company's plans include reentering this mine and resuming gold exploration and
production.
By contrast, "Litigation Hill" was the site of both Earle and Consolidated
Mines, all early producers of high-grade ore until the veins ran out. Recent
geomagnetic activity and a drilling program have located several small
commercial-sized deposits of medium-grade gold ore which can be either milled or
heap leached.
The Company has conducted a geophysics and geochemical survey of
"Litigation Hill." A Schlumberger resistivity survey indicated gold
mineralization down to a depth of 1,000 feet (the limit of the instrument's
sensitivity). Bulk sampling of the ore dumps remaining at these mines indicated
that an overall average grade of the dumps was .206 ounces of gold per ton. Over
1,500 tons of ore were proven with another 500 tons considered to be probable
reserves.
The 1987 exploration of underground workings on "Litigation Hill" showed
that the Earle Mine had experienced massive cave-ins. Two samples were taken
from channel cuts. These samples indicated values of .120 ounces of gold per
ton. The Bath Mine was accessible through a stope which leads directly to the
main
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haulage decline. Channel cut samples were taken on pillars left in
previously-worked stopes. Values varied from .64 to 1.288 ounces of gold per
ton.
The Company initiated a rotary drilling program in 1988. Holes drilled
pursuant to the program varied in depth from 200 feet to 525 feet. Gold values
located in the carbonates at a depth of 70 feet indicate that open pit mining is
suitable for the lower grade ores which are present.
The Company commenced an exploration program during the years 1989 and
1990. This program consisted of two parts: conducting a magnetic survey of the
property and drilling 25 reverse circulation drill-angle holes varying in depth
from 50 to 150 feet. The magnetic survey identified the areas around "Litigation
Hill" and the White Caps Mine as strong targets for further exploration. The
drilling program located several areas of gold mineralization and a small ore
body of about 5,500 tons containing gold values of .18 ounces per ton.
In September 1993, the joint venture partners began a decline (i.e. tunnel)
in order to intercept a drill hole which had been drilled by Freeport Mining
Company in 1983. The drill hole revealed that from 465 feet to 505 feet below
the surface, an average gold grade of .886 ounces of gold per ton over 40 feet
existed. The decline was completed during the Spring of 1994 and drill stations
were prepared. Exploration and drilling activities commenced and are ongoing as
of the date of this Registration Statement. The decline is approximately nine
feet by nine feet and runs at an approximate twelve-degree grade. At the
500-foot level, a turnaround or transfer bay has been added to enable the
operators of the mine to successfully remove ore in a cost-effective method.
The 1993 drilling program also included the mapping and sampling of the old
workings of the Consolidated Mine (which was closed in 1939) as well as the
drilling and sampling of the decline itself in the immediate potential ore zones
contained within the decline.
In July 1995, the Company engaged the services of William R. Wilson, a
minerals industry consultant, to prepare a plan to develop the Nevada Property
(the "Nevada Business Plan"). According to the Nevada Business Plan, two
alternative plans for exploration and development of the Property exist. The
first plan would extend the existing decline in the White Caps Mine to the
565-foot level, rehabilitate and mine old workings in the Consolidated Manhattan
Mine, drift and mine a new area near the drill hole which was intercepted by the
decline formed during the 1993 program, rehabilitate the White Caps Shaft, and
mine the 565-foot level, 670-foot level, 800-foot level, 910-foot level,
1,120-foot level, 1,200-foot level and 1,300-foot level of the White Caps Mine.
According to the Nevada Business Plan, the major advantage to this
alternative would be that access to the lower levels of the White Caps Mine
would be considerably improved. It is anticipated that the lower levels may
yield higher grade ore as compared to the yields anticipated at current levels
of the mine.
A cash analysis pertaining to the first alternative projected capital costs
during the first year of operations to be $1,463,290, operating costs of
$1,719,699 and production of 7,960 ounces of gold resulting in revenues of
$3,088,430. As a result, the cash analysis prepared for the first alternative
projected a positive cash flow of $92,804 after taking into account
depreciation, depletion and amortization.
The second alternative identified in the Nevada Business Plan would extend
the decline in the White Caps Mine to the 565-foot level, rehabilitate and mine
old workings in the Consolidated Manhattan Mine, drift and mine a new area near
the drill hole which was intercepted by the decline formed during the 1993
program, mine the 565-foot level only in the White Caps Mine and conduct
underground sampling in the White Caps Mine in the 670-foot through 1,300-foot
levels.
The Nevada Business Plan identifies the major advantage to this alternative
to be significantly reduced capital costs combined with the opportunity to
sample underground the White Caps Mine without rehabilitating the White Caps
shaft. The disadvantages of this alternative are that mining access to the lower
portions of the White Caps Mine may not be completed and it is still not known
whether access can be obtained to each of the levels below the 560-foot level.
A cash analysis pertaining to the second alternative projected capital
costs during the first year of operations to be $605,840, operating costs of
$1,046,063 and production of 4,568 ounces of gold resulting in
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revenues of $1,772,539. As a result, the cash analysis prepared for this second
alternative projected a positive cash flow of $425,326 after taking into account
depreciation, depletion and amortization.
The Nevada Business Plan concludes by recommending the second alternative
as the preferable alternative for the Company to follow. In June 1996, the
Company initiated the second alternative by contracting with Harrison Western
Mining and Construction Company, Lakeland, Colorado, to execute this plan.
In July 1995, the Company notified Marlowe Harvey and related companies,
then the operator of the Nevada Property, that Marlowe Harvey was not in
compliance with contractual operations under the Nevada Property Agreement as
well as several applicable mining laws and regulations. At that time the Company
assumed the position of operator and continues to act in this capacity.
The Company has begun to establish near-surface gold deposits. Initial
exploration of this nature has revealed two near-surface targets showing
commercial grades and quantities. These are now being developed for processing
and the Company has established an ongoing exploration plan of this nature due
to this success.
All permits for this operation have been issued and the Company is in
compliance with all state, federal and environmental regulations to the best of
its knowledge and belief.
The Company's operations in Nevada initially will be heavily dependent upon
the mill constructed approximately one mile from the Nevada Property which is
currently owned and operated by New Concept Mining, Inc. ("New Concept"). The
Company presently intends to use the New Concept mill for milling the ore
produced from the Nevada Property and selling gold bullion dore bars or
concentrate for sale to third-party buyers. Under the terms of an agreement
entered into with the Company, New Concept has agreed to provide the Company
with the capacity to initially process between 1,000-1,200 tons of ore per
month. New Concept has also agreed to increase processing capacity once the
Company's development program expands. The Company has also been engaged in
preliminary discussions with New Concept to purchase up to one half of the mill.
These discussions have not yet resulted in a binding agreement between the
Company and New Concept.
The Company has also budgeted the sum of One Hundred Thousand Dollars
($100,000) to be spent in the foreseeable future for compliance with applicable
environmental laws. However, the Company can provide no assurance that the
amount so budgeted for environmental compliance will be consistent with the
amounts actually spent for compliance or that the actual amount of such
compliance may not be substantially greater than that which has been projected
to be spent by the Company pursuant to the budget.
Over the past three (3) years, the Company has expended approximately One
Million Five Hundred Thousand Dollars ($1,500,000) on development expenses on or
relating to the Nevada Property. These expenses relate primarily to developing
the most effective means by which to extract the ore and transport it to the New
Concept mill approximately one mile from the Nevada Property.
The Indonesian Concessions
General. In August 1996, the Company entered into an agreement to acquire a
fifty-one percent (51%) interest in a gold exploration property comprising
10,000 hectares (25,000 acres) located in East Kalimantan, Indonesia (the
"Kalimantan Property"). More recently, the Company has entered into two (2)
additional agreements to acquire an additional six (6) gold mining concessions
aggregating over 23,400 hectares (58,500 acres) and three (3) coal mining
concessions comprising 290,000 hectares (725,000 acres). In January 1997, the
Company and Maxwells Energy and Metals Technology Ltd., a Bahamian Company
("Maxwells"), agreed to substitute the original 10,000 hectare property (i.e.
the Kalimantan Property) for a 16,000 hectare (40,000 acre) tract (the "Sopang
Property") located elsewhere on the island of Kalimantan. Ownership of the
Indonesian Concessions will be acquired through the Company's new wholly-owned
subsidiary formed under the laws of the British Virgin Islands known as
Kalimantan Resources, Ltd. ("Kalimantan Resources").
Mineralization of the Indonesian islands known as Kalimantan (the
Indonesian section of Borneo) and Sumatra occurred as a result of rifting of the
earth's crust at the ocean floor. There are approximately fifteen known
mineralized "arcs" comprising all of Indonesia. Six (6) of these arcs contain
the majority of the gold and copper deposits currently discovered in Indonesia.
The Central Kalimantan Arc is the area which has evidenced the majority of
recent attention of mineral exploration efforts although significant work is
also being undertaken in other areas. Located within the Central Kalimantan Arc
is the Kelian Mine which has been operating since 1992 and produces
approximately 450,000 ounces of gold per annum from ore grading approximately
1.8 grams per tonne of gold. Over seventy (70) tonnes of gold has been produced
to date. Based upon current estimated reserves, the mine is scheduled to operate
until 2003. Further south is the Mt. Muro Mine. Production for 1996 at this
mine was 187,000 ounces of gold. At present, it is impossible to
predict whether the Indonesian Concessions possesses any recoverable reserves of
gold ore or whether the yields noted in the above-described mines will be
indicative of the yields to be established on the Indonesian Concessions.
Three (3) agreements cover the various concessions which the Company and
Kalimantan Resources have acquired: (i) the Principles of Agreement by and
between the Company and Maxwells, as amended; (ii) the Acquisition Agreement
dated January 26,1997 by and between Kalimantan Resources and Singkamas Agung
Ltd.; and (iii) the Acquisition Agreement dated February 18, 1997, by and
between Kalimantan Resources and Kaliman Jaya Ltd.
The Sopang Property. The Company acquired its interest in the Sopang
Property pursuant to a document entitled "Principles of Agreement" dated August
19, 1996 ("POA"). The parties to the POA are Maxwells and the Company. The
Company and Maxwells originally agreed to conduct exploration activities on a
10,000 hectare tract, but pursuant to an addendum to the POA, substituted the
16,000 hectare Sopang Property.
In exchange for a fifty-one percent (51%) interest in the concession
relating to the Sopang Property, the Company agreed to convey to Maxwells Four
Hundred Thousand (400,000) shares of its Common Stock. In addition, the Company
must issue an additional Four Million (4,000,000) shares of its Common Stock to
Maxwells should an investment banker confirm by independent appraisal that the
Sopang Property is valued to be at least Twelve Million Dollars ($12,000,000
U.S.) and/or such investment banker provides financing to the Company based upon
an evaluation of at least Twelve Million Dollars ($12,000,000 U.S.) or upon the
appreciation of the Common Stock in an aggregate amount exceeding Twelve Million
Dollars ($12,000,000) within ninety (90) days of an announcement by the Company
of its acquisition of the Indonesian Property. The POA further required the
Company to issue One Million shares (1,000,000) of Common Stock regardless of
whether the Company receives financing or the above-referenced appraisals are
performed if the Company's Common Stock traded consecutively for a period of at
least thirty (30) days. The Company recently received a letter from Maxwells
acknowledging that other than the issuance of 10,800 shares, no additional
shares of Common Stock will be required to be issued until the independent
appraisal mentioned above has been performed. A provision of the POA allows
Maxwells to obtain a "nondilutive" percentage ownership in the Common Stock to
be issued under the POA should the Sopang Property produce at least 2,000,000
ounces of gold. As of the date of this Registration Statement, Three Hundred
Eighty Nine Thousand Two Hundred (389,200) of the Four Hundred Thousand
(400,000) shares required to be issued to Maxwells have in fact been issued
(200,000 shares of which are currently held in the name of Singkamas Agung, Ltd.
but which will be reissued in the name of Maxwells).
While the Company was entitled to defer exploration activities for six (6)
months, exploration activities have commenced and are ongoing on the Sopang
Property.
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Under the POA, the Company is responsible for one hundred percent (100%) of
all exploration and operating expenses relating to the Sopang Property. Maxwells
also enjoys antidilution rights with respect to the Common Stock to be issued
under the POA provided exploration activities result in a valuation evidencing a
yield of at least two million (2,000,000) ounces of gold.
Maxwells has agreed to provide a voting trust in favor of existing
management. Maxwells is not, however, required to vote its shares with existing
management in connection with the registration of Common Stock issued or to be
issued to Maxwells. Maxwells' consent is also required in the case of any
issuance of the Company's capital stock exceeding Two Hundred Fifty Thousand
Dollars ($250,000).
The Company has undertaken efforts to confirm the chain of title which it
believes to exist with respect to the Sopang Property.
Silobat Property. On January 26, 1997, the Company's wholly-owned
subsidiary, Kalimantan Resources, entered into an Acquisition Agreement with
Singkamas Agung Ltd., a Bahamian corporation ("Singkamas"), relating to one (1)
gold mining concession and three (3) coal mining concessions located in
Kalimantan, Indonesia (the "Acquisition Agreement"). Singkamas is an affiliate
of Maxwells and is owned and controlled by the same persons who own and control
Maxwells.
The gold mining concession subject to the Acquisition Agreement relates to
a 62-hectare (155-acre) tract located in West Kalimantan and is known as the
"Silobat Property." Currently, PT Kajiwahida Mandiri, an Indonesian limited
liability company ("PT Kajiwahida"), holds a Kuasa Pertambangan Eksploitasi
license ("KPE") and a Kuasa Pertambangan Pengangkutan and Penjualan license
("KPPE") issued by the Indonesian Directorate General of General Mining and the
Ministry of Mines and Energy on October 7, 1996. On December 21, 1996, PT
Kajiwahida entered into a Mining Authorization Transfer Agreement with PT Duta
Sena Rahayu, an Indonesian limited liability company ("PT Duta"), whereby PT
Kajiwahida agreed to transfer its KPE and KPPE licenses to PT Duta in exchange
for $5,000,000 payable as follows: $100,000 at the time of execution of the
Acquisition Agreement; four consecutive installment payments of $100,000 each on
the fourth days of February, March, April and May 1997; and a final payment of
$4,500,000 at such time as official test results from exploration activities
demonstrate the existence of at least 2,000,000 ounces of gold reserves. Should
exploration activities reveal gold reserves of less than 2,000,000 ounces, the
final payment is to be adjusted in relation to the amount of gold reserves so
established. In addition, PT Kajiwahida is obligated to seek the appropriate
governmental authority to expand its licenses to include a 2,000-hectare tract
contiguous to the 62-hectare tract currently comprising the Silobat Property.
On December 21, 1996, the shareholders of PT Duta and Kalimantan Resources
entered into a Cooperation Agreement whereby in exchange for assuming the
financial responsibilities under the Transfer Agreement, the shareholders of PT
Duta agreed to hold the shares of such limited liability company for the benefit
of Kalimantan Resources. On the same date, Kalimantan Resources entered into a
Participation Agreement with Singkamas whereby Kalimantan Resources agreed to
grant to Singkamas a net profits interest derived from the exploitation of the
Silobat Property.
The Acquisition Agreement with Singkamas requires Kalimantan to secure the
issuance by the Company of Four Million (4,000,000) shares of Common Stock as
follows: Two Hundred Thousand (200,000) upon execution of the Acquisition
Agreement and the balance to be issued upon verification by an independent
evaluation that the value of the Silobat Property and the three (3) Indonesian
Coal Concessions equal or exceed Forty Million Dollars ($40,000,000). In the
case of the initial issuance of shares and twenty-five percent (25%) of the
balance of the shares of Common Stock to be issued, Singkamas is entitled to
"piggyback" registration rights. The Company has issued Four Hundred Thousand
(400,000) shares of its Common Stock to Singkamas as of the date of this
Registration Statement. Of this amount, Two Hundred Thousand (200,000) shares
are to be reissued to Maxwells.
To date, no funds have been transferred by Kalimantan to PT Kajiwahida or
any other party. However, Kalimantan Resources has been given authority to
conduct trenching and pitting and has conducted preliminary mapping, sampling
and trench hole pitting under the supervision of Behre Dolbear & Co. for the
purpose of evaluating the Silobat Property. Results of these tests have not yet
been made public pending verification. The Company (through its association with
Singkamas) is currently in negotiations with PT Kajiwahida to amend the terms of
the Acquisition Agreement to reflect the accord reached by the parties to enable
Kalimantan to conduct further exploration activities on the Silobat Property and
to forego any payments due under the Acquisition Agreement until such time as
all governmental approvals associated with annexing the 2,000-hectare tract have
been secured.
The Silobat Property forms part of what was known as the Chinese district
of Western Borneo and has been the location of substantial exploitation by the
Chinese since the 1880s. In the 1960s, a Dutch company was granted a concession
to conduct mining operations on the Silobat Property, but such property was
abandoned shortly thereafter because of political unrest, sabotage and lack of
funding.
The property is located 1 degree 1 minute north longitude and 109 degrees
12 minutes east latitude in the subdistrict of Sambas, Kalimantan Barat. The
topography of the property is characterized by swampy lowlands with isoldated
hilly outcrops covered mainly with revegetation and local rubber plantations.
The geology is characterized by green-black mudstone, fine silt stone,
quartz-feldspar porphyry and quartz diorite rock types.
In 1977, 21 rock chip and 7 stream sediment samples were submitted for
analysis to the Superintendent Laboratories in Jakarta. Only small traces of
gold were detected in all rock samples submitted while stream sediment samples
yielded values of .5 to 1.05 ppm in four of the seven samples.
In 1982, R.A. Watters conducted an evaluation of the Silobat Property. A
synthesis of the work performed on previous investigations was attempted.
Geological traverses were carried out and samples of rock types were taken. A
portion of the rock type samples was dollied in a pot and washed to a
concentrate representing approximately one kilogram of original material. The
concentrates were then submitted to Rio Tinto Laboratories in Jakarta for
analysis. Six (6) large samples were taken sluiced with existing equipment. The
concentrate obtained was cleaned with gravity traps and the gold separated and
weighed on a balance. Four (4) heavy mineral concentrates were collected from
small creeks located on the most southwestern hill on the property.
Visible gold occurred in all samples of alluvial material. The rock and
stream concentrates were not measurable but gold was detected in four of the
stream concentrates. The R.A. Watters report suggests that it might be possible
to extract up to one gram of gold per cubic meter and that the previous
evaluation estimating 0.33 grams per tonne for hard rock mining activities was
"remarkably realistic."
Munung (Monroe) Property. The Company's wholly-owned subsidiary, Kalimantan
Resources, entered into an Acquisition Agreement for Gold and Coal Concessions
February 18, 1997, with Kalimas Jaya Ltd., a Bahamian corporation ("Kalimas"),
relating to five (5) gold mining concessions and one (1) coal mining concession
(the "Kalimas Acquisition Agreement"). Kalimas is also an affiliate of Maxwells
and is owned and controlled by the same persons who own and control Maxwells.
Kalimas acquired its rights to the concession relating to the Monroe Property
pursuant to a Development Agreement dated February 14, 1997, by and between PT
Muara Mayang Coal Utama ("PT Muara") and Kalimas. Under the Development
Agreement, Kalimas obtained the right to acquire an 80% interest in a Kuasa
Pertambangan Penyelidikan ("KP") issued to PT Muara for the sum of $1,000,000
payable as follows: $150,000 upon execution of the Development Agreement and
verification by Kalimas that PT Muara possesses marketable title to the
concession without encumbrances and $850,000 upon commencement of production and
generation of net profits.
The Monroe Property comprises 6,096 hectares and is located in Central
Kalimantan, Indonesia. It is located in the same general area of the Kelian gold
mining concession which has produced over 450,000 per annum ounces of gold since
1992.
The existing KP issued on the Monroe Property allows PT Muara to conduct a
general survey and perform exploration activities for gold and other precious
metals. The Development Agreement requires PT Muara to use its "expert abilities
and efforts" to obtain additional licenses for the exploitation, production and
refining, and transportation and sale of all minerals obtained from the Monroe
Property.
The Kalimas Acquisition Agreement requires Kalimas to convey a 51% interest
in all current and future licenses which it acquires with respect to the Monroe
Property.
To date, no sums have been paid by Kalimas or Kalimantan Resources to PT
Muara nor has any exploration work been performed on the Monroe Property.
Kalimantan Resources currently intends to complete title work prior to engaging
in any exploration activities.
Telen (Tomak) Property. The second gold concession in which Kalimantan
Resources received rights under the Kalimas Acquisition Agreement is known as
the Telen or Tomak Property. This property comprises 687 hectares and is located
in East Kalimantan, Indonesia. Kalimas acquired its rights to the property
pursuant to a Development Agreement dated February 14, 1997, which it entered
into with PT Walea Bahimas, an Indonesian limited liability company. PT Walea
Bahimas currently holds a KP for general survey and exploration on the property.
Kalimas is required to pay a purchase price of $1,000,000 to acquire an 80%
interest in the current KP. The Development Agreement contains provisions
similar to those contained within the Development Agreement relating to the
Monroe Property with respect to payment terms. Moreover, PT Walea Bahimas will
only be entitled to receive the final $850,000 payment upon commencement of
commercial production and obtaining licenses for exploration and exploitation,
production and refining, and transportation and sale.
Kalimas is obligated to commence exploration in or before April 1997 or at
such other time as agreed upon by the parties. In addition to being required to
dig test pits as part of the exploration program, Kalimas has agreed to: conduct
shallow drilling to a depth of approximately 60 meters during the first 90-day
period, conduct deep drilling to a depth of at least 200 meters during the
second 90-day period, and securing a commitment of at least $300,000 during the
first three (3) years of exploration activities.
The Kalimas Acquisition Agreement requires Kalimas to convey a 51% interest
in all current and future licenses which it acquires with respect to the Tomak
Property. In addition, Kalimas and the Company have agreed that Kalimas will be
entitled to receive a number of shares of Common Stock the amount of which is to
be determined no later than July 1997. The Kalimas Acquisition Agreement further
provides that the value of the Common Stock is to be determined at $10 per
share, which was the approximate value as of January 26, 1997.
To date, no sums have been paid by Kalimas or Kalimantan Resources to PT
Walea Balimas nor has any exploration work been performed on the Tomak Property.
Kalimantan Resources currently intends to complete title work prior to engaging
in any exploration activities.
Long Beleh (La Bella) Property. The La Bella Property represents the third
gold concession in which Kalimantan Resources acquired rights pursuant to the
Kalimas Acquisition Agreement. This property currently comprises 4,637 hectares
and is located in East Kalimantan, Indonesia. Kalimas acquired its rights in and
to a KP for general survey and exploration pursuant to a Development Agreement
dated February 14, 1997, with PT Muara Koman Mas ("PT Muara Koman"). The terms
and conditions for the acquisition of an eighty percent (80%) interest in the
current license and all future licenses held or to be held by PT Muara Koman are
identical to the terms and conditions described above and relating to the Tomak
Property. The obligations of Kalimas under the Kalimas Acquisition Agreement are
identical to the obligations which it possesses with respect to the Tomak
Property.
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To date, no sums have been paid by either Kalimas or Kalimantan Resources
to PT Muara Koman nor has any exploration been performed on the La Bella
Property. Kalimantan Resources currently intends to complete title work prior to
engaging in any exploration activities.
Sengingi Property. The Sengingi Property is the fourth gold concession in
which Kalimantan Resources acquired rights pursuant to the Kalimas Acquisition
Agreement. Unlike the previous gold concessions mentioned in this Section of the
Registration Statement, the Sengingi Property is a 4,000-hectare (10,000-acre)
tract which is located on the island of Sumatra in the province of Riau,
Indonesia. Kalimas acquired the right to obtain an eighty percent (80%) interest
in a KP for exploration and a KPE for exploitation with respect to 3,000
hectares of this property from PT Aksara Mina Artha ("PT Aksara") pursuant to a
Development Agreement dated February 14, 1997. Under the terms of its agreement
with PT Aksara, Kalimas is obligated to pay PT Aksara $1,000,000 to be paid from
production derived from the property. In all other material respects, the terms
and conditions of the Development Agreement between Kalimas and PT Aksara and
the terms and conditions of the Kalimas Acquisition Agreement between Kalimas
and Kalimantan Resources are identical to the terms and conditions described
above with respect to the other gold concessions subject to the Kalimas
Acquisition Agreement.
Kuantan Property. The last gold concession subject to the Kalimas
Acquisition Agreement is known as the Kuantan Property. The Kuantan Property is
also located in Riau Province, Sumatra, Indonesia, and comprises 8,000 hectares.
Kalimas derives its rights pursuant to a Development Agreement dated February
14, 1997, between it and PT Aksara Tama Pramita ("PT Aksara Tama"). PT Aksara
Tama currently holds a KP for general survey and exploration. The general terms
and conditions upon which Kalimas is to acquire an eighty percent (80%) interest
in all current and future licenses on the Kuantan Property are similar to the
terms and conditions upon which all other licenses subject to the Kalimas
Acquisition Agreement have been acquired. The purchase price which Kalimas will
be required to pay for the Kuantan Property is $1,000,000 payable as follows:
$250,000 upon execution of the Development Agreement and verification by Kalimas
that PT Aksara Tama possesses marketable title to the concession without
encumbrances, and $750,000 to be paid upon commencement of production and
generation of net profits.
Indonesian Coal Concessions. As previously mentioned, Kalimantan Resources
and Singkamas entered into an Acquisition Agreement on January 26, 1997. In
addition to acquiring rights to the Silobat Property, Kalimantan Resources
obtained rights to three coal mining concessions aggregating over 286,000
hectares. Singkamas acquired its rights to these three coal mining concessions
pursuant to Development agreements entered into with the PT Andhika Group of
Companies, three Indonesian limited liability brother-sister companies
(collectively referred to as "PT Andhika"). Under the terms of these Development
Agreements, Singkamas received the right to acquire seventy-seven and one-half
percent (77.5%) interest in the three contracts of work ("COWs") currently held
by PT Andhika.
Under the terms of the Acquisition Agreement between Singkamas and
Kalimantan Resources, Singkamas has agreed to assign a fifty-one percent (51%)
in and to the COWs (as well as a fifty-one percent [51%] interest in the Silobat
Property) in consideration of the issuance of 4,000,000 shares of the Company's
Common Stock described elsewhere in this Registration Statement in greater
detail.
In March 1997, Kalimantan Resources, engaged an Indonesian exploration crew
to travel to the properties and to perform preliminary evaluations of possible
coal reserves in place on the three (3) coal concessions located in Indonesia
where the Company and Kalimantan Resources have entered into contracts to
acquire certain exploration and exploitation rights. Behre Dolbear & Co. will
review the results of these activities and present recommendations based upon
such review.
The Company has been contacted by several large coal mining companies for
the purpose of entering into proposed joint ventures to conduct further
exploration and subsequent development of such properties. At present, no joint
venture agreements have been entered into by the Company.
The Company has entered into an agreement with Behre Dolbear & Company,
Inc. ("Behre Dolbear"), an internationally recognized mining consulting firm
which was established in 1988. Behre Dolbear will be responsible for providing
independent technical advisory third-party validation services to the Company as
more particularly outlined in the agreement. A more thorough description of this
agreement is described in the Section of the Registration Statement entitled
"MANAGEMENT."
The Brazilian Timber Properties
The Company has acquired various rights to 693,000 hectares of timber
properties located in the state of Para, Brazil. In evaluating these
properties, the Company has considered only the Jonasa Concessions (comprising
276,000 hectares) in developing its economic forecasts. The property areas
contain a variety of timber species of which initially only seventeen (17) of
the most commercial of the one hundred twenty-five (125) available species have
been selected and factored into the Company's economic forecasts. The other
species will be harvested at the appropriate time.
Of the four existing saw mills located on the Jonasa Concessions, two are
currently operational, while two mills are currently being placed into
production. Immediate expansion plans call for the construction of up to eight
additional mills. The purpose of several small mills as opposed to one large
facility, is to accommodate different varieties of timber and minimize downtime
in the event of mechanical failure or schedule maintenance of any of the mills.
All appropriate infrastructure including power, housing, roads and auxiliary
equipment as well as trained labor and strong management are in place and are
believed to be adequate to accommodate the phased increase in mill capacity.
All shipping and associated transportation services will be provided by
the Jonasa Group, one of the largest private shipping companies in the Amazon
Basin. Their expertise and political position are anticipated to provide
invaluable support to the operation, and as a participant in the joint
venture, allow for operating efficiencies that greatly enhance profitability.
The joint venture also holds the lands in fee title and the existing
operations have virtually no debt.
Equatorial Resources has standing orders for all of its initial start-up
production at 200 cubic meters per day capacity. Additional orders for up to
1,000 cubic meters per day have been submitted to Equatorial Resources and
appear to demonstrate the viability of the immediate expansion noted above.
Five Hundred Thousand Dollars ($500,000) has been or will be provided by
the Company for initial start-up. The Company will also provide $1,500,000 for
the additional expansion noted above.
The United Nations Food and Agricultural Organization (F.A.O.), Simons
Corporation (Canada) and Reid, Collins & Associates, Ltd. (Canada), highly
respected forestry experts, have evaluated 24,000 hectares of the total
holdings and have posited that each hectare will yield approximately 200 cubic
meters of raw timber. If these evaluations are accurate with respect to the
entire Concession, the total potential asset value of all 276,000 hectares
would be approximately 55.2 million cubic meters of raw, hard wood timber.
The Jonasa Concessions. On November 11, 1996, the Company, through
Equatorial Resources Ltd. ("Equatorial Resources"), entered into a letter
agreement with Madeira Intex, S.A., International Exports, a company formed
under the laws of the Greek Democratic Republic ("Madeira"), whereby Madeira
agreed to assign its rights in and to a Joint Venture Agreement which Madeira
had entered into on June 29, 1984, with Companhia Agropecuaria do Rio Jabuti
("Jonasa").
The Joint Venture Agreement required Jonasa to assign to Madeira the
exclusive rights to extract and market all lumber licensed by the appropriate
Brazilian authorities for export. In turn, Madeira was required to provide the
financing for the management of cutting, preserving, protecting, inspecting and
shipping of the lumber species permitted and located on the timber property
owned by Jonasa. All such activities are required to be conducted in accordance
with the Association Technique International des Bois Tropicaux. The original
term of the agreement was for the period needed to extract 13,000,000 cubic
meters from an area of 100,000 hectares. At such time as this quantity was
extracted from the property, Madeira was required to provide the expertise and
financing necessary to reclaim the areas harvested under the Joint Venture
Agreement. Among the other obligations required to be performed by Madeira were
the obligations to provide all labor associated with the transportation and
harvesting of the timber; purchase all lumber cut up to 13,000,000 cubic meters;
issue a letter of credit allowing Jonasa to present sight drafts representing
the purchase price of the lumber to be harvested from the property and
stevedoring costs for the shipment of such lumber; comply with the rules and
regulations of the Association Technique International des Bois Tropicaux; and
supervise all shipping activities. The Joint Venture Agreement required Madeira
to purchase a minimum of 60,000 cubic meters per year. The purchase price of
the lumber to be sold by Jonasa and purchased by Madeira was as follows: for
all "merchantable quality" lumber, $90 per cubic meter; for "fair/average"
quality, $80 per cubic meter; and for "second quality", $67 per cubic meter. The
above purchase prices were to be revised annually commencing in 1986 based upon
a formula involving the average price increase or decrease of the usual
international price variations for same or similar tropical lumber from West
Africa, Central America and the Far East.
Through various addenda, the rights and responsibilities of Madeira have
been modified so as to allow the original joint venture to remain in effect and
to allow Madeira to assign its rights and delegate its responsibilities to
Equatorial Resources.
On July 12, 1984, Madeira entered into an agreement with Thyssen Sudamerica
N. V., a Netherlands Antilles company. Under the terms of this agreement,
Madeira agreed to sell through Thyssen all wood logs, sawed lumber and
byproducts purchased and sold exclusively to the Far East, including Japan,
South Korea, Taiwan, Singapore and the Philippines. Similarly, Thyssen agreed to
exclusively purchase all such products for shipment to such regions of the Far
East. The price which the parties agreed to sell such products was to be
determined on a quarterly basis. Additional provisions of the contract
identified the standards to be met by Madeira as to quality, species types,
quantity and measurements. The Company has received confirmation that Thyssen is
ready, willing and able to abide by the terms of the contract.
In July, 1985, United Amazon Resources Limited, a company owned and
controlled by Madeira ("U.A.R."), and Jonasa entered into a Managing and
Marketing Agreement which effectively gives U.A.R. control over management and
supervision of operations conducted on the Jonasa Concessions. Among other
things, U.A.R. has been granted the authority to manage all of Jonasa's timber
operations, including the Jonasa Concessions.
The Company has also agreed to issue two million (2,000,000) shares of its
Common Stock to Ignatius Z. Theodorou, the principal shareholder and executive
officer of Madeira pursuant to a tax-free stock for assets transaction. To date,
the Company has neither completed its agreement with Mr. Theodorou to effect
such transaction nor issued said shares to him.
The Company has recently commenced timber operations on the Jonasa
Concessions and has recently obtained a preliminary evaluation of a sample of
the Jonasa Concessions, suggesting a possible yield of 200 cubic meters of
hardwood timber per hectare. The Company through its subsidiary, Equatorial
Resources, Ltd., has begun to harvest and cut only a few of the species of trees
located on the Jonasa Concessions, and commenced milling operations at three of
the mills located in the vicinity of the concessions. At present, production at
the mill has aggregated approximately 670 cubic meters since late December 1996.
In mid-March 1997, daily production was increased to 80 cubic meters. The
Company has received approximately $200,000 for the sawed lumber produced to
date. All of this revenue has been reinvested in improvements to the mills and
infrastructure on the property. The Company's subsidiary, Equatorial Resources,
Ltd., currently employs 62 persons to operate the mills and conduct the
activities contemplated under the agreements pertaining to these concessions.
Potential markets for the lumber include the Far East, Brazil, Europe and the
United States. The Company now projects daily production of sawed timber to
increase to 140 cubic meters by April 1997.
Salim Concession. On February 28, 1997, Equatorial Resources accepted a
sales proposal from Joao Salim, et al., to purchase the rights to cut and
harvest up to 300,000 hectares of land located near Portel, Brazil. The
property on which these rights are located is adjacent to one of the properties
relating to the Jonasa Concessions. Under the terms of this proposal, the owner
has agreed to license to Equatorial Resources the right to cut up to 500,000
cubic meters of timber on the property and to pay to the owners approximately
$7.50 per cubic meter. In addition, Equatorial Resources has been granted the
right to purchase the 300,000 hectares for $3,500,000 on terms and conditions to
be agreed upon by the parties. The proposed purchase price for the acquisition
of this license calls for Equatorial Resources to pay seven and one-half Reals
(approximately $7.50) per cubic meter of logs of any and all species cut
pursuant to the concession upon payment of approximately One Million Dollars
($1,000,000). Once this amount is paid, Salim, et al., have agreed to issue the
concession to all 300,000 hectares. Equatorial Resources will also be
responsible for all extraction and transportation expenses. The parties have
further agreed to employ counsel to reach a definitive agreement on or before
March 30, 1997.
To date, Equatorial Resources is further evaluating the viability of
commercial production on the Salim Concession and continuing its title
investigation.
Bernardes Concessions. On March 2, 1997, Equatorial Resources received and
accepted a proposal to participate in a joint venture pertaining to a timber
property aggregating 117,000 hectares. Under the terms of the proposal,
Equatorial Resources has been granted the right to cut timber and to pay the sum
of $5.00 per cubic meter upon payment of approximately $50,000 as an advance
towards the purchase of the timber. Equatorial Resources has conditionally
accepted this proposal subject to the execution of definitive agreements and
completion of all title work necessary to confirm the merchantability of these
concessions.
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4. RISK FACTORS AND SPECIAL MATERIAL CONSIDERATIONS
THIS SECTION OF THE REGISTRATION STATEMENT SETS FORTH THE RISKS AND SPECIAL
CONSIDERATIONS WHICH THE COMPANY BELIEVES MAY EXIST CONCERNING AN INVESTMENT IN
THE COMPANY. PERSONS READING THIS REGISTRATION STATEMENT SHOULD RECOGNIZE THAT
FACTORS OTHER THAN THOSE SET FORTH BELOW MAY ULTIMATELY AFFECT THE COMPANY IN A
MANNER AND TO A DEGREE WHICH CANNOT BE FORESEEN AT THIS TIME. ALL PERSONS ARE
URGED TO CONSULT WITH THEIR ADVISORS PRIOR TO MAKING AN INVESTMENT IN THE
COMPANY IN RELIANCE UPON THIS REGISTRATION STATEMENT SO THAT THEY UNDERSTAND
FULLY THE NATURE OF THE UNDERTAKING AND THE RISKS WHICH MAY BE INVOLVED PRIOR TO
INVESTING. ALL PERSONS ARE URGED TO REVIEW WITH THEIR COUNSEL, ACCOUNTANTS AND
PROFESSIONAL ADVISORS THE FINANCIAL STATEMENTS ATTACHED TO THIS REGISTRATION
STATEMENT. ANY DOCUMENTS DESCRIBED IN THIS REGISTRATION STATEMENT WHICH HAVE NOT
BEEN ATTACHED AS EXHIBITS MAY BE OBTAINED UPON REQUEST FROM THE COMPANY. THIS
REGISTRATION STATEMENT ALSO CONTAINS CERTAIN FORWARD-LOOKING STATEMENTS AND
INFORMATION THAT ARE BASED UPON MANAGEMENT'S BELIEFS AS WELL AS ON ASSUMPTIONS
MADE BY AND UPON INFORMATION CURRENTLY AVAILABLE TO MANAGEMENT. WHEN USED IN
THIS REGISTRATION STATEMENT, THE WORDS "EXPECT," "ANTICIPATE," "INTEND," "PLAN,"
"BELIEVE," "SEEK" AND "ESTIMATE" OR SIMILAR EXPRESSIONS ARE INTENDED TO IDENTIFY
SUCH FORWARD-LOOKING STATEMENTS. HOWEVER, THIS INFORMATION STATEMENT ALSO
CONTAINS OTHER FORWARD-LOOKING STATEMENTS. FORWARD-LOOKING STATEMENTS ARE NOT
GUARANTEES OF FUTURE PERFORMANCE AND ARE SUBJECT TO CERTAIN RISKS, UNCERTAINTIES
AND ASSUMPTIONS, INCLUDING, BUT NOT LIMITED TO, THE FOLLOWING RISK FACTORS,
WHICH COULD CAUSE THE COMPANY'S FUTURE RESULTS AND STOCK VALUES TO DIFFER
MATERIALLY FROM THOSE EXPRESSED IN ANY FORWARD-LOOKING STATEMENTS MADE BY OR ON
BEHALF OF THE COMPANY. MANY OF SUCH FACTORS ARE BEYOND THE COMPANY'S ABILITY TO
CONTROL OR PREDICT. READERS ARE CAUTIONED NOT TO PUT UNDUE RELIANCE ON
FORWARD-LOOKING STATEMENTS. THE COMPANY DISCLAIMS ANY INTENT OR OBLIGATION TO
UPDATE PUBLICLY ANY AND ALL FORWARD-LOOKING STATEMENTS, WHETHER AS A RESULT OF
NEW INFORMATION, FUTURE EVENTS OR OTHERWISE.
Financial Condition of Company
Although the Company was formed in 1985 to engage in precious metal mining
activities, its net worth is limited. The Company is and still should be
considered in its development stage, having a net worth of $9,862,768 as of
February 28, 1997. Moreover, the Company's net worth and the value of both its
Common Stock and Preferred Stock will ultimately be dependent upon the overall
success of mining operations conducted on the Nevada Property and the Indonesian
Concessions and upon timber operations currently being conducted and to be
conducted on the Brazilian Timber Properties.
Under the terms of the Nevada Property Agreement, the sum of Three Hundred
Eighty-Four Thousand Eight Hundred Dollars ($384,800) was to be due and owing
under the Nevada Note and Deed of Trust on January 20, 1999. This amount has
been awarded pursuant to the agreement entered into on February 6, 1997 with the
Selig Entities as described in more detail in the Section of this Registration
Statement entitled "THE COMPANY'S BUSINESS & PROPERTIES." Until such time as all
obligations due under the February 6, 1997 agreement with the Selig Entities are
paid in full and the Deed of Trust reconveyed to the Company, one of the primary
assets of the Company, namely the Nevada Property, will be subject to the terms
and conditions of such instruments. Any default under such agreement or the Deed
of Trust which remains uncured would subject the Company to the possible loss of
the Nevada Property.
In addition, the Company, through its subsidiaries, has undertaken to
expend considerable amounts for exploration activities on certain of the
Indonesian Concessions and considerable amounts on timber-related activities
with respect to certain of the Brazilian Timber Properties. The failure to
generate the significant cash flow from its current operations may result in the
Company's inability to adequately develop its holdings thereby jeopardizing the
Company's ability to continue to hold such assets.
Dependence Upon Management
The business of the Company is and will be greatly dependent upon the
active participation of Christopher D. Michaels and Jeffery S. Kramer. The
Company also anticipates that it will be dependent upon the active participation
of other key personnel and/or consultants in the future. The Company presently
has employment agreements with both Mr. Michaels and Mr. Kramer and has entered
into agreements with key consultants; nevertheless, the loss of the services of
Mr. Michaels, Mr. Kramer and/or other key personnel (including such consultants)
regardless of reason could adversely affect the Company and the Company's
business. The Company does not maintain any life insurance policies enabling it
to receive benefits in the case of either Mr. Michaels' or Mr. Kramer's death.
To the extent that the services of Mr. Michaels or Mr. Kramer would be
unavailable to the Company for any reason, the Company might be required to
employ other executive personnel to manage and operate the Company. There is no
assurance that the Company under such circumstances would be able to employ
qualified persons on terms suitable to the Company to assure the fulfillment of
the objectives stated in this Registration Statement.
Lack of Diversification
The Company has, in the past, maintained other mining properties for
exploration and development. These properties were located in Bolivia, South
America and Vancouver, British Columbia. Through its board
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of directors and shareholders, the Company previously elected to abandon such
other properties. The Company's primary assets presently consist of the Nevada
Property, the Indonesian Concessions and the Brazilian Timber Properties. No
assurance can be given that once the Company completes its present exploration
and development of the Company's properties in Nevada and increases or conducts
its timber operations in Brazil as described in further detail in this
Registration Statement, it will be able to establish and produce significant
revenues from such operations or become profitable. In addition, there can be no
assurance that exploration activities currently being conducted on the
Indonesian Concessions will result in the establishment of commercial quantities
of mineralization. As a result, persons reading this Registration Statement
should be aware that investment in the Common Stock represents an additional
risk because the Company's activities are presently confined to the exploration,
development and gold production of only one mining property, preliminary
exploration activities on certain of the Indonesian Concessions and the
continued conduct of timber operations on one of the Brazilian Timber
Properties.
Risks Associated With the Company's Operations
There are a number of risks inherent in the mining of precious metals and
timber operations which may have a dramatic impact on the value of the Company
and the liquidity of the Common Stock. These risks include, but are not limited
to, the ability to obtain permits, licenses and other governmental approvals;
equipment availability; implementation of proper mining and milling techniques;
title problems; compliance with environmental laws, rules, and regulations;
accuracy of reserve forecasts; and dramatic fluctuations in the price of
precious metals and timber/lumber prices. Because of these and other risk
factors associated with natural resource operations, the Company can give no
assurance that its shareholders will be able to realize either a return on
investment or a return of capital.
Title to the Nevada Property
Mineral interests in the United States are frequently owned by federal and
state governments and private parties. When a prospective mineral property is
owned by a private party or by a state, some type of property acquisition
agreement is necessary in order for a company to explore or develop such
property. Generally, these agreements take the form of purchase agreements, as
in the case of the mining agreement and property agreement discussed below, or
long-term mineral leases. All such purchase agreements and leases are generally
subject to termination in the event of a default.
In addition to the acquisition of mineral rights by state or private
parties, the Company also may acquire rights to explore for and produce minerals
on federally-owned lands. This acquisition is accomplished through the location
of unpatented mining claims upon unappropriated federal land pursuant to
procedures established by the General Mining Law of 1872, the Federal Land
Policy and Management Act of 1976 and various state laws (or the acquisition of
previously-located mining claims from a private party).
The location of a valid mining claim on federal lands requires the
discovery of a valuable mineral deposit, the erection of appropriate monuments,
the posting of a location notice at the point of discovery, the marking of the
boundaries of the claim in accordance with federal law and the laws of the state
in which it is located and the filing of a notice or certificate of location
and a map with the Bureau of Land Management and the real property recording
official of the county in which the claim is located. Failure to follow the
required procedures will render the mining claim void. If the statutes and
regulations for the location of a mining claim are complied with, the locator
obtains a valid possessory right to develop and produce minerals from the claim.
This right can be freely transferred and is protected against appropriation by
the government without just compensation.
The interests represented by unpatented mining claims possess certain
unique vulnerabilities not associated with other types of property interests.
For example, in order to maintain each unpatented mining claim, the claimant
must pay a claim maintenance fee or, if qualified to do so under the small miner
exemption, annually perform not less than $100-worth of work or improvements on
or for the benefit of the claim and must file with state and federal authorities
appropriate documentation. Failure to pay the claim maintenance fee or perform
assessment work will render the claim subject to being declared void or subject
to relocation by third parties. Failure to make the required filings will make
the property deemed to be abandoned. In addition, under applicable regulations
and court decisions, in order for an unpatented mining
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claim to be valid, the claimant must be able to prove that the mineral deposit
on which the claim is based can be mined at a profit both at the time the claim
is located and at all times thereafter. Thus, it is conceivable that, during
times of declining metal prices, claims which were valid when located could be
invalidated by the federal government.
No generally applicable title opinions or title insurance has been obtained
with respect to the Nevada Property with the attendant risk that some titles may
be defective. In fact, the agreements which relate to the current ownership of
the parties (i.e. the 1993 Joint Venture Agreement and the Amended Joint Venture
Agreement) contain incomplete and inadequate descriptions of the mining claims.
However, on the basis of periodic status reports and reviews by the Company's
employees of the relevant land records, the Company has concluded that it has
satisfactory title to the Nevada Property subject to exceptions which the
Company does not believe materially impair the ability to continue to mine and
process the ore and to obtain the economic benefits thereof.
The Company first acquired its rights in and to the Nevada Property
pursuant to a mining agreement dated April 4, 1987 (the "Nevada Property
Agreement"), with Anthony C. Selig & Associates, Dixie Exploration Corporation
and Anthony C. Selig (the "Selig Entities"). The Selig Entities acquired their
rights pursuant to a lease and option to purchase agreement which it had entered
into on November 15, 1982 with Argus Resources, Inc. ("Argus"), pursuant to
which the Selig Entities leased all of Argus' patented and unpatented mining
claims comprising the Nevada Property. Under the terms of the Nevada Property
Agreement, the Company was required to pay the Selig Entities the purchase price
for the Nevada Property (ultimately determined to be $600,000). Additionally,
the Company was required to and did issue 1,300,000 shares of Common Stock to
Argus. The installment obligations owed to the Selig Entities were secured by a
deed of trust on the Nevada Property (the "Deed of Trust"). The stock issued to
Argus was subject to a one-for-ten reverse stock split approved by the Company's
shareholders and effected in 1995.
In 1992, the Company entered into an agreement with Argus, whereby Argus
was to control sixty percent (60%) of the Nevada Property and was to act as
operator in consideration of Argus' assumption of all remaining payments due to
the Selig Entities under the Nevada Property Agreement. Argus and the Company
subsequently entered into a joint venture agreement with Marlowe Harvey/Maran
Holdings, Inc. ("Marlowe Harvey"), whereby in consideration of Marlowe Harvey
assuming all of the then remaining obligations owed to the Selig Entities,
Marlowe Harvey would acquire a fifty-one percent (51%) interest in the joint
venture, Argus would earn a twenty-four and one-half percent (24.5%) interest in
the joint venture, and the Company would earn a twenty-four and one-half percent
(24.5%) interest in the joint venture. In turn, the Nevada Property was to be
conveyed to the joint venture.
The Company has executed agreements with interested parties which may
result in the Company increasing its interest in the joint venture from
twenty-four and one-half percent (24.5%) to a minimum fifty percent (50%)
interest in the joint venture. The rights and responsibilities of both the
Company and Marlowe Harvey/Maran Holdings, Inc., are currently the subject of a
lawsuit filed by the Company on November 4, 1996, in Nye County, Nevada. This
lawsuit, described in the section of this Registration Statement entitled "LEGAL
PROCEEDINGS", will not affect the Company's right to its interest in the Nevada
Property acquired pursuant to the various agreements previously entered into by
the Company. As a result of the issues raised by the lawsuit, however, the
Company may be required to hold or pay a portion of the revenues generated from
mining operations for the benefit of Argus and Marlowe Harvey.
In March 1997, the Company entered into a Sale and Purchase Agreement with
the Selig Entities. Under the terms of this latest agreement, the Selig Entities
agreed to sell to the Company one hundred percent (100%) of their interests in
the Nevada Note, the Deed of Trust, and the Nevada Property for the sum of Three
Hundred Seventy Five Thousand Dollars ($375,000) payable as follows: One Hundred
Thousand Dollars ($100,000) in March 1997 and the balance plus all accrued and
unpaid interest (calculated at the rate of 5.25%) on or before February 6, 1999.
The Company in fact paid the first installment of One Hundred Thousand Dollars
($100,000) in March 1997. The agreement also acknowledges that the Company is
the only person or entity legally entitled to conduct mineral operations on the
Nevada Property. The Company is also required to pay all U.S. Bureau of Land
Management annual maintenance fees associated with the claims comprising the
Nevada Property.
Title to the Indonesian Concessions
Mineral interests in Indonesia are controlled exclusively by the federal
government through the Ministry of Mines and Energy. Title to a mineral property
in Indonesia is subject to obtaining various forms of licenses for the
extraction of commercial quantities of minerals after obtaining property
rights from the fee owner. Title is confirmed by the issuance of a government
seal affixed to specific property location maps.
Under Indonesian law, a foreign mining company may not own a mining
concession. Instead, it may obtain a "Contract of Work," known as a "COW" which
allows the foreign concern the right to conduct certain mining activities
including general surveying, mapping and limited exploration. The COW is
intended to provide assurances to the foreign concern that if commercial
mineralization is established, the government of Indonesia will issue guarantees
as to title, fix taxation rates, permit exports of profit and other conditions
defining the rights of the foreign concern to profit from the enterprise. While
awaiting COW approval, a foreign company may obtain a "SIPP" which allows the
company to conduct preliminary exploration work on a property pending approval
of a COW application.
In lieu of obtaining a COW, a foreign company may elect to enter into a
joint venture with an Indonesian limited liability company known as a "PT".
Under this approach, the PT would hold the various licenses issued by the
Ministry of Mines and Energy for the benefit of the joint venture.
Another alternative is to enter into a transfer agreement with a PT company
which holds the mining concession. Under this arrangement, the PT company would
agree to transfer its licenses to the foreign company at such time as the
foreign company received approval from Indonesian Investment Coordinating Board
(the "BKPM") to form and thereafter forms a "PP20" or "PMA" joint venture
company. The first step in establishing a PP20 or PMA company is to obtain the
approval of the President of Indonesia to form the company. No approval can be
obtained if the BKPM has identified a particular industry or line of business as
closed to foreign investment, and has identified such line on its "Negative
List." If such line of business is open to foreign investment, an application to
the BKPM is submitted for approval. If approved, the PMA or PP20 company may
hold the mining concession directly.
Because direct foreign ownership of mining concessions is difficult, if
not prohibited by Indonesian law, the Company and its subsidiary, Kalimantan
Resources, must rely upon its contractual rights under the various agreements
into which they and/or their predecessors have entered. These contracts are
described in greater detail elsewhere in this Registration Statement. Should a
dispute arise as to the interpretation or enforcement of such agreements, resort
to the Indonesian judicial system will likely be required. It should
be noted that since members of the judicial branch are employed by the executive
branch of the government, a fair opportunity to assert a foreign company's
rights under such agreement may be limited.
The Company has not currently completed its title investigations with
respect to any of the Indonesian Concessions. However, prior to the time at
which any payments will be made to the current holders of the licenses, the
Company will have satisfied itself that either it, Kalimantan Resources, or
the parties with whom it has contracted (and/or their predecessors in interest)
will have good and merchantable title to the particular licenses purported to be
owned by such third parties.
Ownership of licenses to explore for and/or exploit natural resources in
foreign countries is also subject to political risks. The United States has
important economic, commercial and security interests in Indonesia because of
its growing economy and markets and its strategic location in relation to key
international straits. The U.S. and Indonesia maintain cordial and cooperative
relations, although the two countries are not bound by formal security treaties.
Indonesia is a republic based upon its 1945 constitution providing for a
limited separation of executive, legislative and judicial power. The president,
elected to a five-year term, is the overwhelmingly dominant government and
political figure. The president appoints the cabinet, currently composed of
four coordinating ministers (in the fields of political and security affairs,
economic and financial affairs, people's welfare and industrial and trade
affairs), thirteen state ministers, twenty-four ministers and three high
officials with the status of state ministers. Moreover, judges are employees of
the executive branch.
Unlike Western democratic systems, the legislative branch meets only once
during its five-year term, to formulate the overall principles and aims of the
government and to elect the president and vice president. Representative
bodies at all levels in Indonesia eschew voting, preferring to arrive at
decisions through "consultation and consensus."
The party system currently in place in Indonesia reflects the Soeharto
Government's determination to shift the political focus from Indonesia's deep
ethnic, religious and ideological differences which contributed to the collapse
of an earlier Parliamentary democracy in that country. Soeharto's preferred
strategy is an authoritarian program-based development-oriented politics.
The military, especially the army, has provided key advisors to Soeharto
and has wielded great influence on policy. Under a dual function concept,
military officers serve in the civilian bureaucracy at all government levels,
although there has been a recent tendency to somewhat reduce the military's
direct involvement in civilian bureaucracies.
Because of the presence of a strong executive branch, some foreign
companies have been forced to accede to government demands to revise licenses
to include the participation of Indonesian-owned companies, larger foreign
companies and, in some instances, the Indonesian government. The inability of a
foreign company to effectively enforce its rights in licenses issued by the
Indonesian government represents a risk unique to doing business in a
developing country as compared to the United States.
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The Company has entered into a contract with Behre Dolbear & Co., Inc., an
international mining consulting firm established in 1911 to act as
independent engineer and to oversee the exploration and development of and to
provide third-party validation services relating to the Indonesian Concessions
including assisting the Company in various matters relating to title and
governmental regulation.
Title to Brazilian Timber Properties
The Company has acquired its rights to the Brazilian Timber Properties
pursuant to agreements entered into by and between the Company's subsidiary,
Equatorial Resources, Ltd. ("Equatorial Resources"), and Madeira Intex, S.A.,
International Exports ("Madeira"), with respect to the two timber concessions
referred to in this Registration Statement as the "Jonasa Concessions"; Joao
Salim, et al., with respect to the timber concession referred to in this
Registration Statement as the "Salim Concession"; and Dario Jose Balieiro
Bernardes with respect to three timber concessions referred to in this
Registration Statement as the "Bernardes Concessions."
The Company has performed preliminary title work on the Jonasa
Concessions by examining the property files of Companhia Agropecuaria do Rio
Jabuti, a company formed under the laws of the Federative Republic of Brazil
("Jonasa"), and has confirmed that Jonasa purchased its rights to the timber
directly from the state government of Para in 1961. While Equatorial Resources
has commenced timber production from the Jonasa Concessions pursuant to the
terms of the Madeira Joint Venture, there can be no assurance that title
problems and other claims hostile to the chain of title on which the Company has
relied will not arise in the future.
As of the date of this Registration Statement, title work has not been
completed on either the Salim Concession or the Bernardes Concessions. Before
any sums are expended by the Company on timber operations on these concessions,
the Company intends to employ legal counsel to advise it of the status of title
to these concessions.
In addition to the title problems and environmental problems commonly
associated with the development of timber properties in the United States,
foreign ownership of timber rights in foreign countries subjects a U.S.-based
company to the additional risk of political instability. Brazil is a federative
republic with broad powers granted to its federal government. The country is
divided into twenty-seven (27) states and a federal district. It is a country
rich in resources and natural advantages, but has lagged behind its potential
according to U.S. State Department publications. The State Department further
reports that the United States is Brazil's most important commercial partner and
largest investor. Bilateral agreements between the two countries include a
treaty of peace and friendship, an extradition treaty, a joint participation
agreement on communication satellites and scientific cooperation, civil
aviation, and maritime agreements. Brazil's current federal government is headed
by President Fernando Henrique Cardoso who received 54% of the popular vote in
1994. President Cardoso's stated agendas for Brazil include constitutional
amendments for solidifying economic stabilization and other measures designed to
establish long-term stability and growth and to improve Brazil's socioeconomic
imbalances.
Governmental Regulation
Mining operations on the Nevada Property are and will be subject to
substantial federal, state and local regulation concerning mine safety and
environmental protection. Some of the laws and regulations which will pertain to
mining operations include maintenance of air and water quality standards; the
protection of threatened, endangered and other species of wildlife and
vegetation; the preservation of certain cultural resources and the reclamation
of exploration, mining and processing sites. These laws are continually changing
and, as a general matter, are becoming more restrictive. The location of the
Nevada Property is found in an area which strongly encourages mining operation.
However, the Company's inability to comply with such federal, state or local
ordinances and regulations on an ongoing basis may cause significant delays in
the permitting process or in the operations anticipated to be conducted on the
Nevada Property. In addition, delays in such compliance could result in
unexpected and substantial capital expenditures. Although no such problems or
delays are anticipated, no assurances can be given that the Company will be able
to comply with all applicable law and regulations and maintain all necessary
permits, licenses and approvals or, in the alternative, that compliance and/or
permitting will be obtained without substantial delays and/or expenses.
With regard to the Nevada Department of Conservation and Natural Resources,
Division of Environmental Protection ("NDEP"), the Company has received
authorization to proceed with its currently planned mining operations on the
Nevada Property pursuant to the applicable statutes and regulations relating to
a small mining operation. In the event, however, the Company's operations exceed
the designated limits for a limited mining operation, a full reclamation plan
will need to be prepared, submitted and approved by NDEP. The Company is
currently preparing such a reclamation plan. While the Company believes that it
will be able to obtain such approval, there is no guarantee that the required
approval will in fact be obtained by the Company.
A change in the nature or magnitude of the Company's presently anticipated
operations on the Nevada Property may trigger the need to obtain additional NDEP
and other federal, state or local governmental approvals, licenses or permits.
For example, water processing discharge needs may trigger the requirement that
the Company obtain a water pollution control permit. The Company is currently
preparing for submission of an application for a water pollution control
permit. Other significant permits, required by a change in operations on the
Nevada Property, might include an NDEP permit, air quality permit, waste
management permit, archeological clearance and wildlife permit. There is no
guaranty that the Company will be able to
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obtain any or all of the required federal, state or local permits that might be
required to expand its operations on the Nevada Property.
Even if the Company does not change its currently planned operations on the
Nevada Property, the Company is nevertheless vulnerable to the various federal,
state and local laws and regulations governing regulations and protection of the
environment, occupational health, labor standards and other matters. The reason
for this is that these laws are continually changing, and as a general matter,
are becoming more restrictive.
To comply with these federal, state and local laws, the Company may in the
future be required to make capital and operating expenditures on environmental
projects both with respect to maintaining currently planned operations and
the initiation of new operations. Such projects may include, for example, air
and water pollution control equipment; treatment, storage and disposal
facilities for solid and hazardous waste; remedial actions required for the
containment of tailings pond seepage; continuous testing programs; data
collection and analysis land reclamation (specifically including existing mine
and processing waste on the Nevada Property); landscaping and construction
projects. There is no guaranty that the Company will technically or financially
be able to comply with any or all of these potential requirements.
Environmental Regulation and Liability
The Company's proposed mineral operations on the Nevada Property will be
subject to environmental regulation by federal, state and local authorities.
Under applicable federal and state law, the Company may become jointly and
severally liable with all prior property owners for the treatment, cleanup,
remediation and/or removal of substances discovered at the Property which are
deemed by federal and/or state law to be toxic or hazardous ("Hazardous
Substances"). Liability may be imposed among other things for the improper
release, discharge, storage, use, disposal or transportation of Hazardous
Substances only in the areas which the Company disturbs.
Applicable law imposes strict joint and several liability on, among others,
"owners" and "operators" of properties contaminated with Hazardous Substances.
Such liability may result in any and all "owners", "operators" and
"transporters" of contaminated property being required to bear the entire cost
of remediation. The Company may utilize substances which have been deemed by
applicable law to be Hazardous Substances. The potential liability of the
Company under such laws will be derived from the Company's classification as
both an "owner" and "operator" of a contaminated property. While the Company
intends to employ all reasonably practicable safeguards to prevent any liability
under applicable laws relating to Hazardous Substances, mineral exploration by
its very nature will subject the Company to substantial risk that remediation
may be required. If the cleanup or remediation of hazardous substances is
required on the Nevada Property, substantial delays could occur in the
permitting process and/or in the further extraction of gold and other precious
minerals on the Nevada Property.
Much like environmental laws found in the United States, both the federal
state governments in Brazil have adopted laws and standards relating to the
harvesting and reclamation of forests. While the Company and its subsidiary,
Equatorial Resources, has not yet fully familiarized itself with all of these
laws and standards, Equatorial Resources has entered into an agreement with
Eco-Rating International, Incorporated ("Eco-Rating"), Zurich, Switzerland, to
better assist the Company and Equatorial Resources in understanding and
complying with such laws and standards. Under the terms of its agreement with
the Company, Eco-Rating has agreed to establish an "eco-efficiency model"
designed to enable Equatorial Resources to establish environmental management
guidelines for the conduct of activities on the Jonasa Concessions and
ultimately the remainder of the Brazilian Timber Properties consistent with all
applicable environmental laws and standards.
13
<PAGE> 18
Relationship With Other Offerings
From the period March 1, 1994, through February 28, 1997, the Company has
offered and sold 8,342,619 shares of its Common Stock and 228,919 shares of
Preferred Stock. These sales were made to its existing shareholders. The Company
has relied upon applicable exemptions from the registration requirements of the
federal securities laws and upon compatible exemptions from securities
registration under applicable state ("blue sky") laws. In the event that it is
determined that the Company sold and issued these securities without complying
with either the federal securities laws or blue sky laws, the purchasers of
these securities may have the right to rescind the sale of these securities and
to recover the purchase price paid to the Company plus interest accrued on such
purchase price. The Company does not currently have funds with which it could
repay the purchase price and accrued interest from any prior sale of securities.
Moreover, it is doubtful that the Company could continue operations if a
significant number of existing shareholders were to seek to rescind their
purchases of securities. The financial statements of the Company do not reflect
a contingent liability for any such rescission rights.
14
<PAGE> 19
Fluctuation of Gold Prices
Since its deregulation in August 1971, the market price for gold has been
highly speculative and volatile. Since 1980, gold has fluctuated from a high of
approximately $850 per ounce in January 1980 to a low of approximately $285 per
ounce in 1985. Currently gold is trading at approximately $350 per ounce.
Instability in gold prices will affect the profitability of the Company's future
operations.
Similarly coal and timber prices fluctuate. Natural resources have
traditionally evidenced valuable swings in pricing, thereby affecting overall
the relative profitability of engaging in these lines of business. For example,
timber prices increased fifty-two percent (52%) in 1996 while coal prices have
remained relatively stable for the past several years.
15
<PAGE> 20
Selected Financial Data
The financial information accompanying this Registration Statement reflects
the current financial condition of the Company. It should be noted that the
Company has not reported a profit from operations since its inception to the
present. Management projects that the further exploration and development of the
Properties will result in profitable operations although, for the reasons stated
elsewhere in this Registration Statement, no guaranty to that effect can be
made.
Use of Forward-Looking Statements
This Registration Statement contains "forward-looking statements" as that
term is defined in the Private Securities Litigation Reform Act of 1995. Such
statements are found in the Section of the Registration Statement entitled
"MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION" and elsewhere.
Prospective Investors are cautioned that the assumptions upon which such
statements are based cannot be guarantied by the Company to occur in the future
or that the overall success of the Company might be materially adversely
affected should such bases (or some of them) not occur.
Additional Risk Factors
Persons relying upon this Registration Statement should review the
Company's audited financial statements included with this Registration Statement
and the remainder of this Registration Statement in its entirety. Other sections
of this Registration Statement identify other potential risks and special
material considerations which should be analyzed. Persons reading this
Registration Statement are also cautioned that, as with any security, there may
be other risks and special material considerations which are not foreseeable at
this time which may also materially adversely affect an investment in the
Company's securities.
16
<PAGE> 21
5. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Introduction
The Company is a development-stage company, with corporate offices in
Calabasas, California, and with interest(s) in certain mining properties located
in the (1) Manhattan Mining District, Nye County, Nevada, (the "Nevada
Property"); (2) in the Indonesian Gold Belt, Kalimantan, Indonesia (the
"Indonesian Gold Concessions"); (3) in the Kutai District of East Kalimantan,
Indonesia (the "Indonesian Coal Concessions"); (4) on the island of Sumatra,
Indonesia; and (5) in the state of Para, Brazil (the "Brazilian Timber
Properties").
Comparison of Results of Operations-Nine Months Ended February 28, 1997
Compared to Nine Months Ended February 29, 1996
Net loss for the first three fiscal quarters of 1996-97 was $1,319,759
as compared to $468,453 for the same period ended February 29, 1996. The
principal increases in expenses during the nine months ended February 28, 1997
were attributed to expenses in Brazil (approximately $124,000), office salaries
(approximately $50,000), travel (approximately $125,000), stock for services to
employees ($240,000), minority interest expense ($49,500) and a general increase
in other expenses attributable to the Company's increased development activities
from the previous year. During the period from July 1996 to February 28, 1997,
the Company invested $4,000,000 in Common Stock towards the purchase of certain
contractual rights to the seven (7) gold mining concessions comprising the
Indonesian Gold Concessions; $123,147 towards certain exploration activities
relating to the Silobat Property (one of the Indonesian Gold Concessions): and
$1,055,000 ($700,000 in Common Stock) towards the acquisition of and
improvements to the infrastructure relating to the Brazilian Timber Properties;
and $1,565,313 ($250,000 in Common Stock) in development activities on the
Nevada Property.
Year Ended May 31, 1996 Compared to Year Ended May 31, 1995
During the year ended May 31, 1996, the Company reported an operating
loss of $1,198,506 as compared to an operating loss of $611,073 for the year
ended May 31, 1995. The difference between these two periods was principally due
to the issuance of stock to officers for services rendered of $485,000. There
was an increase of $233,981 in cash and cash equivalents for the year ended May
31, 1996 as compared to a decrease in cash and cash equivalents of $78,613 for
the previous fiscal year. The improvement in the availability of cash and cash
equivalents to the Company was the result of the sale of $1,255,325 in stock
offered and sold through private placements. By contrast, the Company sold
$726,013 in stock through private placements for the year ended May 31, 1995.
Year Ended May 31, 1995 Compared to Year Ended May 31, 1994
The Company incurred a net loss of $611,073 in fiscal 1995 compared to a
net loss of $480,473 during fiscal 1994. The principal reason for the increased
loss was due to an increase in salaries of approximately $150,000. The Company
used $616,013 cash in developmental activities in 1995 compared to $749,057 in
1994. Investment in property and equipment was similar each year: $146,496 in
1995 compared to $116,777 in 1994. Proceeds from issuance of stock amounted to
$726,013 in 1995 compared to $975,469 in 1994.
Liquidity and Capital Resources
The Company's working capital position as of February 28, 1997 was a
deficit of approximately $553,000. Almost since inception, the Company has
experienced pressure on its working capital position due to operating losses,
and the need to continually invest in exploration activities on the Nevada
Property and, more recently, the Silobat Property, the remainder of the
Indonesian Concessions, and the Brazilian Concessions.
To raise funds in the past, the Company has relied upon private
placements of its equity securities. Over the past three years, the Company has
raised approximately $4,340,000 pursuant to three such private placements. The
Brazilian operations represent an immediate opportunity for the Company to
generate significant cash flows for the first time. The Company believes that
with the anticipated increase in daily production at its Brazilian operations to
140 cubic meters per day in April 1997, much of its continued operations in
Brazil, Indonesia, and on the Nevada Property will be funded by the cash flow
generated on the Jonasa Concessions. The Company is also currently seeking to
raise between $3,000,000 and $4,000,000 through the private placement of Common
Stock and/or convertible debt instruments with one or more "qualified
institutional buyers" should its immediate need for significant amounts of
capital for its overseas acquisitions and operations in both Indonesia and
Brazil not be met solely from its activities in Brazil.
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<PAGE> 22
6. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following tables set forth certain information as of February 28, 1997,
regarding the record and beneficial ownership of the Common Stock and Preferred
Stock with respect to: (i) any individual or group of affiliated individuals or
persons owning, of record or beneficially, five percent (5%) or more of the
outstanding shares of the Common Stock or the Preferred Stock; (ii) the amount
of shares of Common Stock or Preferred Stock owned by each executive officer and
director of the Company; and (iii) the number of shares of Common Stock and/or
Preferred Stock owned, of record or beneficially, by the directors of the
Company as a group. Except as otherwise indicated, the Company believes that the
beneficial owners listed below, based upon information provided by such owners,
have sole voting and investment power with respect to such shares.
Principal Shareholders
<TABLE>
<CAPTION>
NAME AND ADDRESS AMOUNT AND NATURE
TITLE OF CLASS OF BENEFICIAL OWNER OF BENEFICIAL OWNER PERCENT OF CLASS(1)
- - -------------- ------------------------------- ------------------- -------------------
<S> <C> <C> <C>
Common Christopher D. Michaels 1,294,510(2) 10.91%
876 Ballina Court
Newbury Park, California 91320
Common Jeffrey S. Kramer 1,180,000(3) 9.40%
6053 Paseo Canyon Drive
Malibu, California 90265
Common Joseph C. Rude' III, M.D. 1,274,150(4) 10.15%
3065 River N. Pkwy.
Atlanta, Georgia 30328
Common David Weissberg, M.D. 1,199,900 9.55%
29 Blair Drive
Huntington, New York 11743
Common All Officers and 3,992,160(5) 31.79%
Directors as a Group
(6 persons)
</TABLE>
- - ---------------
(1) In addition to the 12,208,412 shares of Common Stock outstanding as of
February 28, 1997, the percentages noted in this column assume the issuance
of 340,000 shares of Common Stock pursuant to various options primarily to
existing management which may be issued in whole or in part within 60 days
of this Registration Statement and the issuance of an additional 10,800
shares of Common Stock required to be issued to Maxwells Energy & Metals
Technology Ltd. pursuant to the August 26, 1996 Principles of Agreement.
(2) Includes options to purchase up to 100,000 shares of Common Stock which may
be exercised in whole or in part within 60 days of the date of this
Registration Statement.
(3) Includes options to purchase up to 70,000 shares of Common Stock which may
be exercised in whole or in part within 60 days of the date of this
Registration Statement.
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<PAGE> 23
(4) Includes shares owned by Carolyn Rude and Quantum Radiology (an affiliate
of Dr. Rude) as well options to purchase up to 10,000 shares of Common
Stock which may be exercised in whole or in part within 60 days of the
date of this Registration Statement.
(5) Includes options to purchase up to 230,000 shares of Common Stock by all
Directors or Officers as a group which may be exercised in whole or in
part within 60 days of the date of this Registration Statement.
In addition, it should be noted that Ignatius Z. Theodorou, the President
and a director of the Company's eighty percent (80%)-controlled subsidiary,
Equatorial Resources, Ltd., will be entitled to receive Two Million (2,000,000)
shares of the Company's Common Stock at such time as the Company and he
complete the preparation of a tax-free stock for assets agreement consistent
with the November 11, 1996 letter agreement pertaining to the Jonasa
Concessions.
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<PAGE> 24
7. MANAGEMENT
Executive Officers and Directors
The Company's Bylaws authorize the creation of the offices of President,
Treasurer (Chief Financial Officer), one or more Vice Presidents, Secretary and
one or more Assistant Secretaries and Assistant Treasurers as the Board of
Directors deems proper. The Bylaws also provide for not less than three
directors and not more than seven directors who shall hold office until the
following annual meeting of the shareholders. The Bylaws further provide that
the number of directors may be increased by the affirmative vote of the Board of
Directors or a majority in interest of the shareholders at an annual or special
meeting.
The executive officers and directors of the Company and/or its
subsidiaries are as follows:
<TABLE>
<CAPTION>
NAME AGE POSITION
- - ------------------------ ---- -----------------------------------------------
<S> <C> <C>
Christopher D. Michaels 53 President and Chairman of the Board
Jeffrey S. Kramer 42 Senior Vice President, Chief Financial Officer
and Director
Stanley J. Mohr 61 Vice President of Shareholder Relations and
Director
Edna Pollock 60 Director
Joseph Rude III, M.D. 52 Director
William Michaels 79 Vice President of Client Relations
Ignatius Z. Theodorou 55 President and Director of Equatorial
Resources, Ltd.
</TABLE>
CHRISTOPHER D. MICHAELS cofounded the Company in June 1986. Since then he
has served as President, Chief Executive Officer and Chairman of the Board of
the Company and is entitled to retain his positions with the Company until the
next annual meeting of the Company's shareholders. Mr. Michaels is also a
director, vice president and chairman of the Board of Equatorial Resources, Ltd.
and the chairman and a director of Kalimantan Resources, Ltd., subsidiaries of
the Company. Mr. Michaels received a bachelor of arts degree from Alfred
University located in New York. After graduation, he accepted a post with the
United States government overseas in the Peace Corps. Since 1980, Mr. Michaels
has acted in sales and management positions in corporations whose primary
business consists of mining and minerals. Mr. Michaels has extensive background
and experience in international relations and has spent considerable time at the
Company's Bolivian mine site (closed in 1992) as well as on the Nevada Property.
Mr. Michaels is a party and is subject to the permanent injunction more
particularly described in the Section of the Registration Statement entitled
"LEGAL PROCEEDINGS." Mr. Michaels has also been and is subject to a cease and
desist order issued by the Pennsylvania Securities Commission issued February
27, 1989, prohibiting the Company, Mr. Michaels and other executive officers
from violating Section 201 of the Pennsylvania Securities Act of 1972 relating
to the sale of unregistered "penny stocks."
JEFFREY S. KRAMER, Senior Vice President, Chief Financial Officer,
Secretary-Treasurer and Director, has held these positions since 1989 and is
entitled to retain these positions with the Company until the next annual
meeting of the Company's shareholders. Mr. Kramer is also a director, vice
president and the secretary-treasurer of Equatorial Resources, Ltd. and a
director and the secretary-treasurer of Kalimantan Resources, Ltd. He has held
management positions with Continental Cafes. As Chief Financial Officer, Mr.
Kramer's responsibilities include business affairs, contract administration,
public relations and broker and shareholder relations. Mr. Kramer was also
responsible for management oversight of the Nevada Property operations since
1995 and was management's liason in negotiating the Company's settlement with
the Securities & Exchange Commission more particularly described in the Section
g this Registration Statement entitled "LEGAL PROCEEDINGS." Mr. Kramer is a
party and is subject to the regulatory proceedings described in the Section of
the Registration Statement entitled "LEGAL PROCEEDINGS" and the action taken by
the Pennsylvania Securities Commission detailed above with respect to Mr.
Michaels.
STANLEY J. MOHR, has been Vice President Client Relations with Nevada
Manhattan since 1986. Mr. Mohr became a Director of the Company in 1992 and is
entitled to retain his current positions with the Company until the next annual
meeting of the Company's shareholders. He is also a director of Kalimantan
Resources, Ltd. Mr. Mohr has been employed as a marketing executive with several
mining and mineral related companies and has gained extensive experience in many
phases of operations in the mining industry. Mr. Mohr held a real estate license
issued by the state of Nevada from 1976 to 1984. Mr. Mohr was a party and is
subject to the regulatory proceedings more particularly described in the Section
of the Registration Statement entitled "LEGAL PROCEEDINGS."
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<PAGE> 25
EDNA POLLOCK was elected to the Board of Directors on April 3, 1995 and is
entitled to retain her position as director until the next annual meeting of the
Company's shareholders. Ms. Pollock is a court reporter in North Carolina and
has been a shareholder of record since 1989. She has been an active member of
the Shareholders' Advisory Committee for several years representing shareholders
at Director's meetings. Ms. Pollock is a graduate of Columbia University, New
York, New York, having received her bachelor of arts degree in Journalism. She
spent twenty-eight years as a freelance reporter for both the federal and state
courts in North Carolina and acted in her official capacity as a court reporter
at numerous depositions, arbitrations, hearings and conventions.
DR. JOE RUDE' III was elected to the Board of Directors on April 3, 1995,
and is entitled to retain his position as a director until the next annual
meeting of the Company's shareholders. Dr. Rude' is a radiologist and has been
practicing his medical specialty since 1977 in Georgia. Dr. Rude' has been a
shareholder of record since 1989 and has been an active member of the
Shareholders' Advisory Committee for several years representing shareholders at
Director's meetings. Since 1995, Dr. Rude' has been a diagnostic radiologist at
Quantum Radiology, Atlanta, Georgia. From 1977 to 1995, he was associated with
Cobb Radiology Associates, Austell, Georgia, which merged with Quantum Radiology
in 1995. Dr. Rude' is a graduate of the University of Texas, Austin, Texas,
where he received his bachelor of arts degree in 1966. In 1970, he was awarded a
medical degree from the University of Texas Southwestern Medical School, Dallas,
Texas. Dr. Rude' is board certified in radiology and served in the United States
Air Force as a flight medical officer from 1971 to 1973.
WILLIAM MICHAELS, Vice President of Client Relations, has served in such
capacity or in other capacities since the Company's inception. Mr. Michaels is
the father of Christopher D. Michaels, the Company's President and Chairman of
the Board. Mr. Michaels is a party and is subject to the regulatory proceedings
more particularly described in the Section of the Registration Statement
entitled "LEGAL MATTERS, AUDITORS AND PENDING LEGAL PROCEEDINGS."
IGNATIUS Z. THEODOROU, President and Director of Equatorial Resources, Ltd.
has served in such capacities since the formation of the Company's
Brazilian-based subsidiary. Mr. Theodorou is the remaining shareholder of
Equatorial Resources, owing twenty percent (20%) of such company. Mr. Theodorou
was born in Greece but has spent a substantial portion of the last thirty-seven
(37) years in the United States. Mr. Theodorou holds dual citizenship (Greek and
U.S.) and is currently managing the Company's operations at the Jonasa
Concessions. His employment experience has included consulting arrangements with
Dames & Moore Consulting Company, employment as Managing Director of the
Liberian-owned shipping company Crest Lines Inc., and founder and chief
executive officers of the timber companies known as Madira Intex, S.A.
International Imports and United Amazonian Resources, Limited.
Significant Employees and Consultants
The Company has entered into employment agreements dated January 1, 1995,
with Christopher D. Michaels and Jeffery S. Kramer relating to their respective
positions as executive officers and directors of the Company. Under the terms
and conditions of these employment agreements, both Mr. Michaels and Mr. Kramer
are required to devote substantially all of their business time and effort
during normal business hours to the Company through December 31, 1997. As
compensation for the services rendered and to be rendered to the Company, Mr.
Michaels is entitled to receive annual salaries equal to One Hundred Forty-Eight
Thousand Seven Hundred Twenty-Seven Dollars ($148,727) per annum and Mr.
Kramer is entitled to a salary of One Hundred Thirty-Seven Thousand Two Hundred
Twelve Dollars ($137,212) per annum. Both the salaries of Mr. Michaels and Mr.
Kramer are to be reviewed on each anniversary date of the Agreement by the board
of directors for the purposes of either increasing or decreasing such base
salary. The Board, however, may not reduce the base salary of either Mr.
Michaels or Mr. Kramer by more than twenty percent (20%) of the base salary for
the immediately preceding year. In addition, both Mr. Michaels and Mr. Kramer
have each received 900,000 shares of the Company's Common Stock as part of their
compensation under the terms of their employment agreements.
In addition to the base salaries and stock options, both Mr. Michaels and
Mr. Kramer are entitled to receive reimbursement on a monthly basis for all
reasonable expenses incurred in connection with the performance of their duties
under the employment agreement. Mr. Michaels and Mr. Kramer are also entitled to
certain fringe benefits (including but not limited to paid vacation and
participation in medical insurance plans and employee benefit plans) which now
are or may thereafter become available to all executive officers of the Company
and such other benefits (if any) as may be authorized from time to time by the
board of directors of the Company. The employment agreements also authorize
these officers to receive a "merit bonus" ranging between twenty-five percent
(25%) and seventy-five percent (75%) of such officer's base salary in the event
the Company experiences operating cash flow for a fiscal year equal to not less
than One Million Dollars ($1,000,000). Specifically, if the Company's operating
cash flow for any fiscal year ranges between One Million Dollars ($1,000,000)
and Two Million Dollars ($2,000,000), both Mr. Michaels and
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<PAGE> 26
Mr. Kramer will be entitled to a "merit bonus" equal to twenty-five percent(25%)
of their base salary; if the operating cash flow is between Two Million Dollars
($2,000,000) and Three Million Dollars ($3,000,000) for any fiscal year, the
"merit bonus" will be equal to fifty percent (50%) of such officer's base pay;
and if the Company's operating cash flow is over Three Million Dollars
($3,000,000) or more during any fiscal year, during the term of the Agreement,
such officer's "merit bonus" will be equal to seventy-five percent (75%) of such
officer's base salary. In the event of termination of the employment agreement
by the Company for cause or by such officer without cause, the "merit bonus" is
not required to be paid. In the event of termination for any other reason, the
"merit bonus" will be pro rated for the fiscal year in which termination occurs.
The employment agreements with Messrs. Michaels and Kramer contain a
covenant prohibiting such officer from engaging directly or indirectly as a
principal partner or director or officer of any business competitive with the
Company. However, such officer may hold up to a five percent (5%) equity
interest in any entity engaged in a business competitive with the Company
without violating such covenant.
The agreements contain provisions for termination in the event of such
officer's permanent disability, death, or for cause. In addition, the agreements
provide for severance compensation equal to such officer's highest monthly base
salary times thirty-six. Both Mr. Michaels and Mr. Kramer also possess an option
to acquire up to twenty-five percent (25%) of the number of then outstanding
shares of the Company's capital stock at a price of five cents per share in the
event of an occurrence of a "Change in Control." For the purposes of such
employment agreements, the term "Change in Control" shall be deemed to have
occurred if the Company sells substantially all of its assets to a single
purchaser or to a group of associated purchasers in a single transaction or
series of related transactions; shares of the Company's outstanding capital
stock constituting more than twenty percent (20%) of the voting power of the
Company's outstanding capital stock are sold, exchanged, or otherwise disposed
of in one transaction or in a series of related transactions; or the Company is
a party to a merger or consolidation in which the Company is not the surviving
entity or the Company's shareholders receive shares of capital stock of the new
or continuing corporation constituting less than 80 percent of the voting power
of the new or continuing corporation.
The Company has engaged the services of Arthur J. Mendenhall to act as
project geologist for the Nevada Property. His duties include acting as the
on-site representative of the Company and to provide geological exploration and
mining grade control of the Nevada Property on a daily basis.
Mr. Mendenhall is an experienced mining geologist. He received his bachelor
of science degree in 1971 and his master of science degree in geology from Utah
State University, Logan, Utah. Mr. Mendenhall's work experience includes roles
supervising and monitoring the work of senior geologists in the coring and
sampling of ore, working as senior geologist in the sampling and mapping of
tertiary volcanic rock formations in gold exploration projects, collecting
cuttings and core samples for geochemical analyses, drafting drill hole cross
sections and supervised drilling operations for bentonite and iron ore. Mr.
Mendenhall has completed the Occupational & Safety Hazard Agency ("OSHA")
forty-hour hazardous waste site training course and OSHA'S refresher course and
has attended other geological seminars and courses relevant to mining. Mr.
Mendenhall is a registered geologist in the Commonwealth of Pennsylvania and a
member of the Geological Society of America.
The Company's subsidiary, Equatorial Resources, Limited, will be heavily
dependent upon its President, Ignatius Z. Theodorou, for the operations
conducted on the Jonasa Concessions. This dependence will be particularly acute
because Mr. Theodorou's company, Madeira Intex, S.A., International Exports,
is the predecessor-in-interest to Equatorial Resources with respect to the
agreements under which Equatorial Resources will be operating and managing the
Jonasa Concessions. Neither the Company nor Equatorial Resources has an
existing employment agreement with Mr. Theodorou. However, the Company believes
that Mr. Theodorou's interest in the Company and Equatorial Resources will
allow him to devote substantially all of his time and efforts to the Company's
operations in Brazil.
Limitations on Director and Officer Liability
The Company's Bylaws do not contain a provision entitling any director or
executive officer to indemnification against liability under the Securities Act
of 1933 (the "'33 Act"). Sections 78.751 et seq. of the Nevada Revised Statutes
allow a company to indemnify its officers, directors, employees and agents from
any threatened, pending or completed action, suit, or proceeding, whether
civil, criminal, administrative or investigative, except under certain
circumstances. Indemnification may only occur if a determination has been made
that the officer, director, employee or agent acted in good faith and in a
manner which such person believed to be in the best interests of the Company. A
determination may be made by the shareholders; by a majority of the directors
who were not parties to the action, suit, or proceeding confirmed by opinion of
independent legal counsel; or by opinion of independent legal counsel in the
event a quorum of directors who were not a party to such action, suit or
proceeding does not exist. Provided the terms and conditions of these provisions
under Nevada law are met, officers, directors, employees and agents of the
Company may be indemnified against any cost, loss or expense arising out of any
liability under the '33 Act. Insofar as indemnification for liabilities arising
under the '33 Act may be permitted to directors, officers and controlling
persons of the Company, the Company has been advised that in the opinion of the
Securities and Exchange Commission, such indemnification is against public
policy and is, therefore, unenforceable.
Agreement with Gold King Mines Corporation
On April 1, 1995, the Company entered into an Agreement with Gold King
Mines Corporation ("Gold King"), Denver, Colorado. Under the terms of this
Agreement, Gold King has agreed to provide the services of William R. Wilson on
a consulting basis at the rate of $400 per day. The initial term of the
consulting agreement was through December 31, 1995, and extended for one-year
periods upon mutual agreement between Gold King and the Company. Gold King and
the Company have extended this consulting agreement for two years.
Mr. Wilson has provided various services to the Company including the
preparation of the Company's business plans and executive reports. Mr. Wilson
possesses a professional degree in metallurgical engineering from the Colorado
School of Mines, Golden, Colorado, and has been awarded a Master's in Business
Administration from the University of Southern California, Los Angeles,
California. In his more than thirty years of experience, Mr. Wilson has, for
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<PAGE> 27
the past fifteen years, served in various seniority executive capacities with
engineering, construction and consulting firms, many of such capacities as
president or the chief executive officer of mining companies operating in the
United States and internationally. Mr. Wilson is the past chairman of the
Colorado Mining Association. Gold King is a subsidiary of Sheridan Reserve
Corporation, a publicly-traded resource company based in Toronto, Canada.
Mr. Wilson's primary responsibility to the Company has been and will be to
act as project manager for the Nevada Property and to act as the Company's
representative to Harrison Western Mining & Construction Company, the mining
contractor for the Nevada Property. Mr. Wilson will also provide technical and
managerial consulting to the Company on the Indonesian Concessions.
Agreement with Behre Dolbear & Company
The Company entered into a Consulting Services Agreement (the "Consulting
Agreement") with Behre Dolbear & Company ("Behre Dolbear"), an internationally
recognized mining consulting firm established in 1911. Under the terms of the
Consulting Agreement, Behre Dolbear will be responsible for providing
independent technical advisory third-party validation services relating to the
Indonesian Concessions. Such services initially require Behre Dolbear to advise
and validate the exploration program contemplated by the Company and would
include related technical input for other aspects of project development. The
term of the Consulting Agreement is for six months or upon satisfactory
completion of the consulting services contemplated prior to such expiration
date. The Company has agreed to pay Behre Dolbear the hourly rate of $137.50 up
to a maximum of $1,100 per diem for the services contemplated under the
Consulting Agreement and has committed to utilize Behre Dolbear a minimum of two
days per month. Unused days will accrue under the Consulting Agreement but will
be forfeited if not prior to the expiration of the term of the agreement. The
Company must also reimburse Behre Dolbear for any travel; reasonable and
necessary lodging expenses (including meals); telegram, cable, telex charges; a
2.5% "flat" labor charge in lieu of actual telephone charges; printing, copying,
reproduction and fax charges; postage, courier, express and freight charges; use
of personal automobiles; royalties on computer software; professional liability
insurance (assessed on a 1.5% flat fee basis); clerical fees at the rate of $35
per hour; and other costs and expenses incurred by Behre Dolbear and/or its
personnel in performing the services contemplated by the Consulting Agreement.
Agreement with Eco-Rating International
In order to better assure compliance with applicable Brazilian
environmental laws and regulations, the Company has entered into an agreement
with Eco-Rating International, Zurich, Switzerland ("Eco-Rating"). Under the
terms of the agreement, Eco-Rating has agreed to develop an "eco-efficiency
model" designed to establish environmental management guidelines for the
Company's operations in Brazil. It is the objective of the Company to establish
a reputation as a leader in the timber industry in environmentally-related
issues and to develop its properties in a manner best designed to properly
reclaim any areas harvested pursuant to its concessions.
Shareholders' Advisory Committee
In 1989, the Company formed a Shareholder Advisory Committee (the "Advisory
Committee") comprised of up to 12 outside shareholders. The purpose of the
Advisory Committee is to participate in directors' meetings and compensation
meetings, as well as planning meetings related to all aspects of corporate
development. Members are selected annually from a group of shareholders who
respond to Company inquiries regarding interest in participating on the Advisory
Committee. Membership is rotated annually. One of the primary purposes of this
Committee is to provide independent, shareholder participation in critical
decisions relating to overall corporate strategy.
23
<PAGE> 28
8. EXECUTIVE COMPENSATION
The table set forth below identifies the compensation paid to the Company's
executive officers for the last three completed fiscal years (i.e. fiscal years
ending May 31, 1994; May 31, 1995; and May 31, 1996):
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG TERM COMPENSATION
-----------------------------------------------------
AWARDS PAYOUTS
ANNUAL COMPENSATION ------------------------- -----------------------
------------------------------------------------ RESTRICTED SECURITIES ALL
NAME AND OTHER STOCK UNDERLYING LTIP OTHER
PRINCIPAL ANNUAL AWARD(S) OPTIONAL/ PAYOUTS COMPENSATION
POSITION YEAR SALARY($) BONUS($) COMPENSATION($)(1) ($) SARS(#) ($) ($)
-------- ---- --------- -------- ------------------ ---------- ---------- -------- ------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Christopher Michaels,
President and Chairman
of the Board........... 1996 $100,449 -- $6,316.00 $225,000(2) 10,000(3) -- --
1995 $148,727 -- $5,712.00 -- 10,000 -- --
1994 $137,222 -- $5,712.00 -- 10,000 -- --
Jeffrey Kramer, Senior
Vice President and 1996 $117,791 -- $7,658.00 $225,000(4) 10,000(5) -- --
Director............... 1995 $137,212 -- $6,564.00 -- 10,000 -- --
1994 $135,117 -- $6,564.00 -- 10,000 -- --
</TABLE>
- - ---------------
(1) The Company incurs the annual cost of health insurance for Messrs. Michaels
and Kramer and their respective dependents.
(2) The Company granted Messrs. Michaels and Kramer the option to purchase
900,000 shares of Common Stock each at an average price of $1.50 per share.
These options were exercised during the year ended May 31, 1996, at which
time the Company's board of directors agreed to issue these shares for
services rendered. The Company has valued these restricted securities to be
worth twenty-five cents ($.25) per share.
(3) The Company has granted stock options to all members of its board of
directors in the amount of 10,000 shares per full year of service as an
active member of the board. These options may be exercised at $1.00 per
share of Common Stock. Options may not be exercised after the expiration of
10 years from the date of the grant and are nontransferable other than by
inheritance. As of the date of this Registration Statement, the Company has
granted options aggregating 100,000 shares to Mr. Michaels and 70,000 shares
to Mr. Kramer.
(4) See Footnote 2.
(5) See Footnote 3.
Options and Stock Appreciation Rights
The table set forth below provides certain information concerning
individual grants of stock options and stock appreciation rights (whether
granted in connection with stock options or as "freestanding" rights made from
inception to date and during the last fiscal year of the Company ending
May 31, 1996) to each of the named executive officers noted below:
OPTION/SAR GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
INDIVIDUAL GRANTS POTENTIAL REALIZABLE
VALUE AT ASSUMED
ANNUAL RATES OF STOCK
PRICE APPRECIATION
FOR OPTION TERM
--------------------------------------------------------------------------------------------------------------
NUMBER OF % OF TOTAL
SECURITIES OPTIONS/
UNDERLYING SARs
OPTIONS/ GRANTED TO EXERCISE
SARS EMPLOYEES OR BASE EXPIRATION
NAME GRANTED(#) IN FISCAL YEAR PRICE($/SH) DATE 5%($) 10%($)
(a) (b) (c) (d) (e) (f) (g)
---- ---------- -------------- ----------- ----------- ----------- ---------
<S> <C> <C> <C> <C> <C> <C>
Christopher D. Michaels.. 100,000 10% $1.00 May 31, '06 $16,289 $25,937
Jeffrey S. Kramer........ 70,000 14% $1.00 May 31, '06 $16,289 $25,937
Stanley Mohr............. 40,000 25% $1.00 May 31, '06 $16,289 $25,937
Edna Pollock............. 10,000 100% $1.00 May 31, '06 $16,289 $25,937
Joe Rude' III............ 10,000 100% $1.00 May 31, '06 $16,289 $25,937
</TABLE>
24
<PAGE> 29
- - ---------------
(1) The Company has granted stock options to all members of its board of
directors pursuant to Stock Option Agreements executed at various times.
Under the terms of these agreements, each director has been granted options
to purchase 10,000 shares of Common Stock per full year of service. The
exercise price for such options is $1.00 per share. The years in which stock
options were initially granted to each respective board member are as
follows: Christopher Michaels, 1986; Jeffrey Kramer, 1989; Stanley Mohr,
1993; Edna Pollock, 1996; and Joe Rude' III, 1996. In 1996, the Stock
Option Agreements relating to Messrs. Michaels, Kramer and Mohr were
extended so that they may be exercised through May 31, 2006. The remaining
may not be exercised after the expiration of ten (10) years from the date
of grant and are nontransferable other than by inheritance.
(2) See Footnote 1.
(3) See Footnote 1.
<PAGE> 30
LEGAL PROCEEDINGS
In May 1989, the Company received notice that the Securities and Exchange
Commission (the "Commission") had commenced an informal investigation into the
Company's compliance with the registration and disclosure requirements of the
Securities Act of 1933 (the "'33 Act") and the Securities Exchange Act of 1934
(the "'34 Act"). Thereafter the Commission commenced an extensive review of the
Company's books and records relating to the, Company's business and mining
operations, its capital raising activities, its financial condition and
history. Through all stages of the investigation, the Company cooperated with
the Commission.
The Commission and the Company agreed to terminate the Commission's
investigation by the entry of a consent judgment against the Company and certain
of the Company's past and present key employees. These key employees include
Christopher D. Michaels, Jeffrey Kramer and Stanley Mohr. The term and
conditions of the consent judgment can be summarized as follows:
1. The Company neither admitted nor denied any of the allegations
alleged by the Commission;
2. The Company and its officers, agents, servants, employees and
others receiving actual notice of the consent judgment are permanently
restrained and enjoined from selling securities in interstate commerce
unless and until a registration statement is in effect or the security or
transaction is exempt from the registration provisions of the '33 Act
and/or '34 Act;
3. The Company and its officers, agents, servants, employees, and
others receiving actual notice of the consent judgment are permanently
restrained from engaging in any transaction, practice or course of
conduct, employing any course of conduct, or obtaining any money or
property by means of an untrue statement of a material fact, or any
omission to state a material fact, necessary to make the statements made in
light of the circumstances under which they were made not misleading.
On April 7, 1994, the Company and the Commission entered into a stipulation
regarding the resolution of all outstanding issues which then existed, which
stipulation was entered as an order by the United States District Court for the
Central District of California. Such stipulation contained an acknowledgement
that the Company and its executive officers had received no ill-gotten gains as
a result of prior activities by the Company in offering and selling its
securities, and that the consent judgment resolved once and for all, all issues
raised by the Commission as a result of the Company's prior activities. The
Company was not required to pay any fines or required to disgorge any monies
previously received by it in connection with its securities.
As plaintiff, the Company filed on November 4, 1996 a complaint (the
"Action") in Nye County, Nevada against Marlowe Harvey, Maran Holdings Inc.,
Calais Resources Inc., and Argus Resources, Inc. (the "Harvey Entities"). The
complaint in the Action alleges, amongst other things, that the Harvey Entities
breached their obligations under various agreements (including the October 20,
1995 amendment to the Joint Venture Agreement discussed in further detail in the
Section of this Registration Statement entitled "THE COMPANY'S BUSINESS AND
PROPERTIES -- The Nevada Property"). The Action seeks to require the Harvey
Entities to specifically perform their obligations to convey a 1% interest in
the joint venture Nevada Property to the officers of the Company (namely Messrs.
Michaels and Kramer) and a 52% interest in the outstanding and issued stock in
Argus Resources, Inc. The Action also seeks damages of approximately $4,000,000
resulting from the actions or inactions of the defendants. It is unknown at the
present time whether the Harvey Entities have the ability to transfer the
required 52% interest in Argus Resources, Inc., as required under the Amended
Joint Venture Agreement, whether the Harvey Entities have substantive defenses
which would prevent the Company from obtaining specific performance, or whether
the remaining shareholders of Argus Resources, Inc., have approved and/or
ratified the Amended Joint Venture Agreement at any time. If the Company is
successful in obtaining specific performance of the agreements alleged in the
Action, it will effectively continue to own or control an undivided 50% interest
in the Nevada Property.
To date the complaint has been served on all defendants. In January 1997,
the parties held an initial joint case management conference. The parties have
voluntarily exchanged documents pursuant to local court rules. The Company
currently intends to commence formal discovery within the next several days.
The Company anticipates that the Harvey Entities will vigorously defend the
Action.
26
<PAGE> 31
10. MARKET PRICE OF AND DIVIDENDS ON
COMPANY'S EQUITY
The authorized capital stock of the Company consists of 50,000,000 shares
of which 49,750,000 shares are Common Stock with a par value of one cent ($.01)
per share and 250,000 shares of Series A Preferred Stock with a par value of
$1.00 per share and convertible into Common Stock on the terms and conditions
hereinbelow described. As of February 28, 1997, there were 12,208,412 shares of
the Company's Common Stock issued and outstanding and 228,919 shares of the
Preferred Stock issued and outstanding. The average price paid per share for the
Common Stock to date has been approximately $2.00 per share while the price per
share paid for the Preferred Stock has been $10.00 per share, with an effective
conversion price (determined on the basis of one-for-ten conversion rights
accorded the Preferred Stock shareholders) to be $1.00 per share.
The following description of the capital stock of the Company and certain
provisions of the Company's Amended Articles of Incorporation and Certificate of
Determination of Preferences of Series A Preferred Stock is a summary and is
qualified in its entirety by the provisions of those documents which have been
filed as exhibits to the Company's Registration Statement of which this
Registration Statement is a part.
The Company received approval for trading of its Common Stock on the
Electronic Bulletin Board (NASDAQ) in March 1996 and has been trading under the
symbol "NVMH". From the period from December 1995 until March 1996, the
Company published "bid" and "ask" prices on the "pink sheets". The low and
high prices for the Common Stock since commencement of quotations are as
follows:
<TABLE>
<CAPTION>
HIGH DATE LOW DATE
- - ------ ---------------------------- ------ ----------------------------
<S> <C> <C> <C>
$14.125 March 3, 1997 $1.25 December 1995
</TABLE>
Since the commencement of trading on the Electronic Bulletin Board, the
average monthly volume of trading of the Company's Common Stock has been
approximately 200,000 shares. Prospective Investors should be aware that the
volume of trading on the Electronic Bulletin Board traditionally has been
limited and there can be no assurance that the Electronic Bulletin Board will
provide an effective market for a shareholder to sell his or her Common Stock of
the Company.
The Company has applied for listing with the American Stock Exchange
("AMEX") by requesting a preliminary listing eligibility opinion. It is
anticipated that the Company will be admitted to list its Common Stock prior to
or as of the Effective Date of this Registration Statement.
27
<PAGE> 32
11. DESCRIPTION OF SECURITIES BEING REGISTERED
Common Stock
The issued and outstanding shares of Common Stock are validly issued,
fully paid and nonassessable. Subject to the rights of holders of Preferred
Stock, the holders of outstanding shares of the Common Stock are entitled to
receive dividends out of assets legally available therefor at such time and at
such amounts as the Board of Directors may, from time to time, determine. See
"Dividend Policy." The shares of Common Stock are neither redeemable nor
convertible and the holders thereof have no preemptive or subscription rights to
purchase any securities of the Company. Upon liquidation, dissolution or
winding up of the Company, the holders of the Common Stock are entitled to
receive, pro rata, the assets of the Company which are legally available for
distribution after payment of all debts and other liabilities and subject to the
rights of any holders of the Preferred Stock then outstanding. Before declaring
any dividends, the Board of Directors may set apart out of any funds of the
Company available for dividends such sum or sums as they may, from time to time,
deem in their discretion to be proper working capital or as a reserve fund to
meet contingencies or for equalizing dividends or for such other purposes as the
directors shall deem conducive to the interests of the Company. Each outstanding
share of the Common Stock is entitled to one vote on all matters submitted to a
vote of stockholders if there is no cumulative voting in the election of
directors.
Preferred Stock
The Company's Amended Articles of Incorporation and its Certificate of
Determination of Preferences of Series A Preferred Stock authorized the Company
to issue up to 250,000 shares of the Preferred Stock. The holders of the
Preferred Stock are entitled to receive dividends at the rate of eight percent
per annum of the original issue price per share out of any funds legally viable
therefor payable on each January 1, April 1, July 1 and October 1 after the
issuance of the Preferred Stock. Dividends on the Preferred Stock are cumulative
so that if the full dividends in respect of any preference dividend are not
paid, the deficiency will be fully paid or declared and set apart for such
shares (without interest) before any dividend or other distribution is paid on
or declared or set apart for any other class or series of the Common Stock or
preferred shares of the Company. The Company enjoys the right to pay any
dividend on the Preferred Stock in cash or through the issuance of additional
shares of Preferred Stock or Common Stock having an issue price equal to the
amount of the dividend or through a combination of cash and stock. In the event
of any liquidation, dissolution or winding up of the Company, either voluntarily
or involuntarily, the holders of the Preferred Stock will be entitled to receive
prior and in preference to any distribution of any of the assets or surplus
funds of the Company to the holders of the Common Stock or any other class of
preferred shares of the Company an amount equal to $10 per share plus a further
amount equal to any dividends declared but unpaid on such shares. In the event
of any consolidation or merger of the Company, or a sale of all or substantially
all of the assets of the Company or a series of related instructions in which
more than fifty percent of the voting power of the Company is disposed of,
holders of the Preferred Stock will not be entitled to treat such event as a
liquidation, dissolution or winding up of the Company. Holders of the Preferred
Stock enjoy the right to convert each share of Preferred
28
<PAGE> 33
Stock into ten (10) shares of the fully-paid and nonassessable shares of the
Common Stock through December 31, 1997. Additionally, the Company is required to
convert the Preferred Stock into ten (10) shares of Common Stock on or before
the earlier of December 31, 1997 or the date on which a registration statement
filed with the Securities & Exchange Commission by the Company and designed to
raise at least Five Million Dollars ($5,000,000) becomes effective.
Dividend Policy
The Company has established a policy of not paying dividends on the Common
Stock and anticipates that this policy shall remain in effect until further
notice. To date, the Company has not paid any dividends in cash or in stock on
the Preferred Stock. Management of the Company is currently planning and
arranging for payment of all cumulative dividends on the Preferred Stock through
the issuance of shares of Common Stock or through the payment of cash after
giving effect to the conversion of Preferred Stock to Common Stock on a
ten-for-one basis.
29
<PAGE> 34
Transfer Agent and Registrar
The transfer agent and registrar for the Common Stock and the Preferred
Stock is US Stock Transfer Corporation, Glendale, California.
30
<PAGE> 35
12. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
The following pages contain the financial statements of the Company for
the fiscal years ending May 31, 1994, 1995, and 1996 and for the periods ending
February 28, 1996 and 1997.
31
<PAGE> 36
NEVADA MANHATTAN MINING INCORPORATED
INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
<TABLE>
<CAPTION>
Page
----
<S> <C>
Independent Auditors' Report............................................. F-2
Consolidated Balance Sheet at February 28, 1997 (Unaudited)
and May 31, 1996 and 1995.......................................... F-3
Consolidated Statements of Operations
for the Nine Months Ended February 28, 1997 and 1996 (Unaudited)
and the Years Ended May 31, 1996, 1995 and 1994.................... F-4 - 5
Consolidated Statements of Changes in Stockholders' Equity
for the Nine Months Ended February 28, 1997 and 1996 (Unaudited)
and the Years Ended May 31, 1996, 1995 and 1994.................... F-6 - 7
Consolidated Statements of Cash Flows
for the Nine Months Ended February 28, 1997 and 1996 (Unaudited)
and the Years Ended May 31, 1996, 1995 and 1994.................... F-8 - 9
Notes to Consolidated Financial Statements.............................. F-10
</TABLE>
F-1
<PAGE> 37
INDEPENDENT AUDITORS' REPORT
To the Board of Directors and Stockholders
Nevada Manhattan Mining Incorporated
(A Development Stage Company)
We have audited the accompanying consolidated balance sheets of Nevada Manhattan
Mining Incorporated (a development stage company) as of May 31, 1996 and 1995,
and the related consolidated statements of operations, changes in stockholders'
equity and cash flows for each of the years in the three-year period ended May
31, 1996. These financial statements are the responsibility of the Company's
management. Our responsibility is to express an opinion on these financial
statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audits to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the consolidated financial statements referred to above present
fairly, in all material respects, the financial position of Nevada Manhattan
Mining Incorporated as of May 31, 1996 and 1995, and the results of its
operations and its cash flows for each of the years in the three-year period
ended May 31, 1996, in conformity with generally accepted accounting principles.
The accompanying financial statements have been prepared assuming that the
Company will continue as a going concern. As discussed in Note 1 to the
financial statements, the Company has suffered losses from its development stage
activities and has a net working capital deficiency that raise substantial doubt
about its ability to continue as a going concern. Management's plans in regard
to these matters are also described in Note 1. The financial statements do not
include any adjustments that might result from the outcome of this uncertainty.
Jackson & Rhodes P.C.
/s/ Jackson & Rhodes P.C.
Dallas, Texas
March 21, 1997
F-2
<PAGE> 38
NEVADA MANHATTAN MINING INCORPORATED
(A DEVELOPMENT STAGE COMPANY)
CONSOLIDATED BALANCE SHEETS
ASSETS
<TABLE>
<CAPTION>
February 28, May 31,
------------- ---------------------------
1997 1996 1995
------------- ----------- -----------
(unaudited)
<S> <C> <C> <C>
Current assets:
Cash $ 135,534 $ 233,981 $ --
Accounts receivable -- -- 1,846
Prepaid expenses 164,500 -- 2,545
----------- ---------- ----------
Total current assets 300,034 233,981 4,391
----------- ---------- ----------
Property and equipment (Note 2):
Domestic mining properties and equipment 5,510,369 3,961,047 3,696,295
Indonesian mining property (Note 7) 4,123,147 -- --
Brazilian timber concession (Note 7) 700,000 -- --
Furniture and fixtures 162,833 63,842 64,046
Less accumulated depreciation (66,567) (59,067) (52,867)
----------- ---------- ----------
10,429,782 3,965,822 3,707,474
----------- ---------- ----------
$10,729,816 $4,199,803 $3,711,865
=========== ========== ==========
<CAPTION>
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 86,761 $ 88,226 $ 124,983
Accrued liabilities 306,175 181,162 283,169
Notes payable to stockholders 256,196 136,751 93,182
Current portion of long-term debt (Note 3) 68,150 44,388 23,278
----------- ---------- ----------
Total current liabilities 717,282 450,527 524,612
Long-term debt (Note 3) 100,266 115,723 105,919
----------- ---------- ----------
Total liabilities 817,548 566,250 630,531
----------- ---------- ----------
Minority interest in subsidiary 49,500 -- --
----------- ---------- ----------
Commitments and contingencies (Note 4) -- -- --
Stockholders' equity (Note 5):
Common stock to be issued, 210,800 shares
(Notes 5 and 7) 108 -- 495,000
Preferred stock to be issued, $1 par value,
250,000 shares authorized -- -- 737,327
Stock subscriptions receivable -- -- (50,500)
Preferred stock, $1 par, 250,000 shares
authorized, 228,919 and 132,510 shares
issued 228,919 132,510 --
Common stock, $.01 par; 49,750,000 shares
authorized; 12,208,412, 8,353,881 and
4,658,481 shares issued each period 122,084 83,539 46,585
Additional paid-in capital 22,629,435 15,079,460 12,305,772
Deficit accumulated during the
development state (13,117,778) (11,661,956) (10,452,850)
----------- ----------- -----------
Total stockholders' equity 9,862,768 3,633,553 3,081,334
----------- ----------- -----------
$10,729,816 $ 4,199,803 $ 3,711,865
=========== =========== ===========
</TABLE>
See accompanying notes to consolidated financial statements.
F-3
<PAGE> 39
NEVADA MANHATTAN MINING INCORPORATED
(A DEVELOPMENT STAGE COMPANY)
CONSOLIDATED STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
NINE MONTHS
ENDED FEBRUARY 28, YEARS ENDED MAY 31,
--------------------------- -------------------------------------------
1997 1996 1996 1995 1994
----------- ---------- ----------- ---------- ----------
(unaudited)
<S> <C> <C> <C> <C> <C>
Expenses:
Costs and expenses of
development stage activities $ 1,319,759 $ 468,453 $ 1,198,506 $ 611,073 $ 480,473
----------- ---------- ----------- ---------- ----------
Net loss (1,319,759) (468,453) (1,198,506) (611,073) (480,473)
Cumulative preferred dividends (136,063) -- (10,600) -- --
----------- ---------- ----------- ---------- ----------
Net loss attributable
to common shareholders $(1,455,822) $ (468,453) $(1,209,106) $ (611,073) $ (480,473)
=========== ========== =========== ========== ==========
Net loss per common share $ (0.14) $ (0.07) $ (0.16) $ (0.12) $ (0.15)
=========== ========== =========== ========== ==========
Weighted average
shares outstanding 10,405,727 6,414,837 7,428,081 5,021,801 3,146,727
=========== ========== =========== ========== ==========
</TABLE>
See accompanying notes to consolidated financial statements.
F-4
<PAGE> 40
NEVADA MANHATTAN MINING INCORPORATED
(A DEVELOPMENT STAGE COMPANY)
CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE PERIOD FROM INCEPTION (JUNE 10, 1985)
TO FEBRUARY 28, 1997 (UNAUDITED)
<TABLE>
<CAPTION>
<S> <C>
Expenses:
Costs and expenses of
development stage activities $ 12,809,932
Loss on disposition
of mining properties 161,183
------------
12,971,115
------------
Net loss (12,971,115)
Cumulative preferred dividends (146,663)
------------
Net loss attributable
to common shareholders $(13,117,778)
============
</TABLE>
See accompanying notes to consolidated financial statements.
F-5
<PAGE> 41
NEVADA MANHATTAN MINING INCORPORATED
(A DEVELOPMENT STATE COMPANY)
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
<TABLE>
<CAPTION>
Stock Preferred Stock
Stock Subscriptions --------------------------
to be Issued Receivable Shares Amount
-------------- ------------- ------------ ------------
<S> <C> <C> <C> <C>
Stock issued from inception (June 10, 1985)
to May 31, 1993 (unaudited):
For cash $ -- $ -- $ --
For services
For property
Shares borrowed from officers (Note 8)
Losses from inception to
May 31, 1993 (unaudited)
---------- ---------- ----------- ------------
Balance, May 31, 1993 -- -- -- --
Stock issued for cash -- -- -- --
Net loss -- -- -- --
---------- ---------- ----------- ------------
Balance, May 31, 1994 -- -- -- --
Shares to be issued
to officers (Note 5) 495,000 --
Shares issued for cash (Note 5) 131,500 (50,000) -- --
Shares issued in settlement
of claims (Note 5) -- -- -- --
Shares issued as conversion
of debt (Note 5) 605,827 --
Net loss -- --
----------- ----------- ----------- ------------
Balance, May 31, 1995 1,232,327 (50,000) -- --
<CAPTION>
Deficit
Accumulated
Common Stock Additional During the
-------------------------- Paid-in Developmental
Shares Amount Capital Stage Total
---------- ----------- ----------- ------------- -----------
Stock issued from inception (June 10, 1985)
to May 31, 1993 (unaudited):
For cash 2,450,460 $ 24,505 $11,019,902 $ -- $11,044,407
For services 219,016 2,190 113,545 115,735
For property 140,000 1,400 1,400
Shares borrowed from officers (Note 8) (495,000) (495,000)
Losses from inception to
May 31, 1993 (unaudited) (9,361,304) (9,361,304)
---------- ----------- ----------- ------------- ----------
Balance, May 31, 1993 2,809,476 28,095 10,638,447 (9,361,304) 1,305,238
Stock issued for cash 1,155,225 11,552 963,917 -- 975,469
Net loss -- -- -- (480,473) (480,473)
---------- ----------- ----------- ------------- ----------
Balance, May 31, 1994 3,964,701 39,647 11,602,364 (9,841,777) 1,800,234
Shares to be issued
to officers (Note 5) -- -- -- -- 495,000
Shares issued for cash (Note 5) 647,213 6,472 638,541 -- 726,013
Shares issued in settlement
of claims (Note 5) 32,500 325 32,175 -- 32,500
Shares issued as conversion
of debt (Note 5) 14,067 141 32,692 -- 638,660
Net loss -- -- -- (611,073) (611,073)
---------- ----------- ----------- ------------- ----------
Balance, May 31, 1995 4,658,481 46,585 12,305,772 (10,452,850) 3,081,334
</TABLE>
(Continued)
See accompanying notes to consolidated financial statements.
F-6
<PAGE> 42
NEVADA MANHATTAN MINING INCORPORATED
(A DEVELOPMENT STATE COMPANY)
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
<TABLE>
<CAPTION>
Stock Preferred Stock Common Stock
Stock Subscriptions ----------------- ----------------------
to be Issued Receivable Shares Amount Shares Amount
------------ ------------- -------- ------ -------- ---------
<S> <C> <C> <C> <C> <C> <C>
Balance, May 31, 1995 $ 1,232,327 $ (50,500) -- $ -- 4,658,481 $ 46,585
Issuance of stock previously purchased (1,232,327) -- 13,150 13,150 554,400 5,544
Cash received from stock subscriptions -- 50,500 -- -- -- --
Shares issued for cash -- -- 119,360 119,360 1,001,000 10,010
Shares issued for services (Note 5) -- -- -- -- 1,940,000 19,400
Shares issued in connection
with shareholder loan -- -- -- -- 200,000 2,000
Preferred dividend -- -- -- -- -- --
Net Loss -- -- -- -- -- --
----------- ----------- -------- ------- --------- ---------
Balance, May 31, 1996 -- -- 132,510 132,510 8,353,881 83,539
Shares issued for property (Note 7) 108 -- -- -- 789,200 7,892
Shares issued for cash -- -- 226,926 226,926 989,762 9,897
Shares issued for services -- -- -- -- 120,000 1,200
Shares issued for conversion
of debt -- -- -- -- 650,400 6,504
Conversion of preferred -- -- (130,517) (130,517) 1,305,169 13,052
Preferred dividend -- -- -- -- -- --
Net Loss -- -- -- -- -- --
----------- ----------- --------- -------- ---------- --------
Balance, February 28, 1997 (unaudited) $ 108 $ -- 228,919 $228,919 12,208,412 $122,084
=========== =========== ========= ======== ========== ========
</TABLE>
<TABLE>
<CAPTION>
Deficit
Accumulated
Additional During the
Paid-in Development
Capital Stage Total
------------ ------------ -----------
<S> <C> <C> <C>
Balance, May 31, 1995 $12,305,772 $(10,452,850) $ 3,081,334
Issuance of stock previously purchased 1,213,633 -- --
Cash received from stock subscriptions -- -- 50,500
Shares issued for cash 1,075,455 -- 1,204,825
Shares issued for services (Note 5) 465,600 -- 485,000
Shares issued in connection
with shareholder loan 19,000 -- 21,000
Preferred dividend -- (10,600) (10,600)
Net Loss -- (1,198,506) (1,198,506)
----------- ------------ -------------
Balance, May 31, 1996 15,079,460 (11,661,956) 3,633,553
Shares issued for property (Note 7) 4,942,000 -- 4,950,000
Shares issued for cash 2,122,714 -- 2,359,537
Shares issued for services 238,800 -- 240,000
Shares issued for conversion
of debt 128,996 -- 135,500
Conversion of preferred 117,465 -- --
Preferred dividend -- (136,063) (136,063)
Net Loss -- (1,319,759) (1,319,759)
------------ ------------- ------------
Balance, February 28, 1997 (unaudited) $22,629,435 $(13,117,778) $ 9,862,768
============ ============= =============
</TABLE>
See accompanying notes to consolidated financial Statements
F-7
<PAGE> 43
NEVADA MANHATTAN MINING INCORPORATED
(A DEVELOPMENT STAGE COMPANY)
CONSOLIDATED STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
Nine Months
Ended February 28, Years Ended May 31,
--------------------------- ---------------------------------------
1997 1996 1996 1995 1994
------------- ---------- ----------- ---------- ----------
(Unaudited)
<S> <C> <C> <C> <C> <C>
Cash flows from developmental activities:
Net loss $ (1,319,759) $ (468,453) $(1,198,506) $ (611,073) $ (480,473)
Adjustments to reconcile
net loss to net cash used
in developmental activities:
Common stock issued for services 240,000 - 485,000 - -
Loss on disposition of property - - - - -
Settlement of claim with debt - - - 32,500 -
Depreciation 7,500 4,650 6,200 9,150 6,708
Minority interest expense 49,500 - - - -
Changes in assets and liabilities:
Accounts receivable - - 1,846 (1,846) -
Prepaid expenses (164,500) 2,545 2,545 - -
Accounts payable and accrued liabilities (12,515) (51,773) (149,364) (44,744) (275,292)
------------ ---------- ----------- ---------- ----------
Net cash used in developmental activities (1,199,774) (513,031) (852,279) (616,013) (749,057)
------------ ---------- ----------- ---------- ----------
Cash flows from investing activities:
Purchase of property and equipment (1,521,460) (109,512) (187,481) (146,496) (116,777)
------------ ---------- ----------- ---------- ----------
Cash flows from financing activities:
Additions to long-term debt 14,556 - - - -
Change in bank overdraft - 55,569 - - -
Payments on long-term debt (6,251) (54,000) (46,153) (42,117) (31,133)
Net change in notes payable
to stockholders 254,945 30,000 64,569 - -
Proceeds from issuance of stock
and stock to be issued 2,359,537 601,200 1,255,325 726,013 975,469
------------ ---------- ----------- ---------- ----------
Net cash provided by financing activities 2,622,787 632,769 1,273,741 683,896 944,336
------------ ---------- ----------- ---------- ----------
Net increase (decrease) in
cash and cash equivalents (98,447) 10,226 233,981 (78,613) 78,502
Cash and cash equivalents:
Beginning of period 233,981 - - 78,613 111
------------ ---------- ----------- ---------- ----------
End of period $ 135,534 $ 10,226 $ 233,981 $ - $ 78,613
============ ========== =========== ========== ==========
Supplemental cash flow information:
Cash paid during the period for interest $ - $ - $ 9,647 $ 12,701 $ 12,701
============ ========== =========== ========== ==========
</TABLE>
Non-cash transactions:
During the year ended May 31, 1995, the Company issued stock for conversion of
notes payable (see Note 5).
During the year ended May 31, 1996, the Company issued 200,000 shares of
common stock, valued at $21,000 in connection with a loan from a shareholder.
Also during the year ended May 31, 1996, the Company assumed $77,067 in debt
in connection with acquiring an additional interest in the mine (Note 2).
During the period ended February 28, 1997, the Company issued 589,200 shares
of common stock in connection with the Indonesian mining property
acquisitions, 100,000 shares for domestic mining services and 100,000 shares
for a Brazilian timber concession (Note 7).
See accompanying notes to consolidated financial statements.
F-8
<PAGE> 44
NEVADA MANHATTAN MINING INCORPORATED
(A DEVELOPMENT STAGE COMPANY)
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE PERIOD FROM INCEPTION (JUNE 10, 1985)
TO FEBRUARY 28, 1997 (UNAUDITED)
<TABLE>
<CAPTION>
<S> <C>
Cash flows from developmental activities:
Net loss $ (12,971,115)
Adjustments to reconcile net loss to net cash
used in developmental activities:
Common stock issued for services 725,000
Loss on disposition of property 156,183
Settlement of claim with debt 97,265
Depreciation 66,567
Minority interest expense 49,500
Changes in assets and liabilities:
Prepaid expenses (164,500)
Accounts payable and accrued liabilities 246,273
-------------
Net cash used in developmental activities (11,794,827)
-------------
Cash flows from investing activities:
Purchase of property and equipment (5,625,466)
-------------
Cash flows from financing activities:
Additions to long-term debt 330,011
Payments on long-term debt (165,291)
Net change in notes payable to stockholders 256,196
Proceeds from issuance of stock 17,134,911
and stock to be issued -------------
Net cash provided by financing activities 17,555,827
-------------
Net increase in cash and cash equivalents 135,534
Cash and cash equivalents:
Beginning of period --
-------------
End of period $ 135,534
=============
</TABLE>
See accompanying notes to consolidated financial statements.
F-9
<PAGE> 45
NEVADA MANHATTAN MINING INCORPORATED
(A DEVELOPMENT STAGE COMPANY)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
MAY 31, 1996 AND 1995
AND FEBRUARY 28, 1997 AND 1996
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Organization
Nevada Manhattan Mining Incorporated was organized under the Laws of the
State of Nevada on June 10, 1985, to acquire, explore, develop, finance and
sell mining rights and properties. As of May 31, 1996 the Company is in the
development stage, in that planned principal operations have not commenced.
The Company has to date acquired properties and begun exploration and
development.
Preparation of the Company's financial statements in conformity with
generally accepted accounting principles requires management to make
estimates and assumptions that affect certain reported amounts and
disclosures. Accordingly, actual results could differ from those estimates.
Basis of Presentation
The Company's financial statements have been presented on the basis that it
is a going concern, which contemplates the realization of assets and the
satisfaction of liabilities in the normal course of business. The Company is
reporting a net loss of $1,198,506 and $611,073 for the years ended May 31,
1996 and 1995 and $1,319,759 for the period ended February 28, 1997 and net
cash resources were used in developmental activities for each year and for
the period then ended.
The following is a summary of managements' plan to raise capital and generate
additional operating funds. Management has reached an agreement to have gold
ore milled adjacent to its Nevada property by a third party, reducing capital
requirements of the Company. The Company and its joint venture partners in
the Nevada property have constructed a 1400 foot decline underground access
to enhance exploration and facilitate the extraction of gold ore. The Company
has negotiated an agreement with Harrison Western Mining and Construction
Company to begin production in July 1996. The Company has acquired and
commenced the exploration and development of its mineral holdings in
Indonesia and its Brazilian timber operations. Management will attempt to
raise additional capital through a private or public sale of common stock or
by loans. Though the Company has been able to raise funds from private
placement of its equity securities in recent years, there is no assurance of
future availability of funds from these sources.
F-10
<PAGE> 46
NEVADA MANHATTAN MINING INCORPORATED
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Statement of Cash Flows
For statement of cash flow purposes, the Company considers short-term
investments with original maturities of three months or less to be cash
equivalents.
Property and Equipment
Mining properties acquisition, exploration and development costs are
capitalized as incurred and will be amortized on the units-of-production
method based on economically recoverable mineral reserves. The Company
assesses impairment of mineral properties on an area-by-area basis which
aggregates contiguous areas. Estimated site restoration and closure costs in
which the Company has reclamation responsibilities are charged against
operating earnings on the units-of-production method over the expected
economic life of the mines.
Other property and equipment are carried at cost. Depreciation of other
property and equipment is provided using the straight-line method over the
seven year estimated useful lives of the related assets. Maintenance and
repairs are charged to operations as incurred and expenditures for major
improvements are capitalized. Gains and losses from retirement or replacement
of property and equipment are included in operations.
Income Taxes
The Company accounts for income taxes pursuant to Statement of Financial
Accounting Standards No. 109, "Accounting for Income Taxes" (SFAS 109) which
requires the use of the asset and liability method of computing deferred
income taxes. The objective of the asset and liability method is to establish
deferred tax assets and liabilities for the temporary differences between the
financial reporting basis and the tax basis of the Company's assets and
liabilities at enacted tax rates expected to be in effect when such amounts
are realized or settled.
Net Loss Per Common Share
Per share amounts have been computed on the weighted average number of common
shares outstanding for each period. All share and per share amounts have been
restated to retroactively reflect the reverse stock split explained in Note
5. Convertible preferred shares are considered antidilutive since conversion
would decrease loss per share.
F-11
<PAGE> 47
NEVADA MANHATTAN MINING INCORPORATED
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Principles of Consolidation
The consolidated financial statements include the accounts of the Company and
its subsidiaries. All significant intercompany accounts and transactions are
eliminated in consolidation.
2. MINING PROPERTIES AND EQUIPMENT
The Company previously owned a 24.5 percent undivided interest in a mining
property in the Manhattan Mining District, Nye County, Nevada. The property
consists of 28 patented (fee) and 65 unpatented mine claims which include the
Whitecaps Mine, Union Mine, Consolidated Mine, Earl Mine, Bath Mine and other
assorted mines and claims which cover approximately 1,200 acres. Under
contractual understandings reached during October 1995, which are in the
final stages of confirmation, the Company has increased its interest to 50
percent and has assumed an additional $77,067 in debt (Note 3) in connection
therewith.
In March 1997, the Company entered into an agreement to purchase the note and
deed of trust in its entirety which is secured by the property (see Note 7).
Management of the Company is active in the supervision of work taking place,
plus future planning of all aspects of operations. The operating permits for
the Manhattan Gold Mine were issued to the Company by the State of Nevada
during April 1996. The Company has negotiated an agreement with Harrison
Western Mining and Construction Company for the beginning of production in
July 1996. The work was begun in July 1996 and included placement of mine
shops and support facilities; mining in the existing workings of the mine and
extension of the existing decline from its end location of 1,200 linear feet
from the surface to the White Caps Level. Underground flooding and caving of
the existing decline required an alternate access way and a new decline was
driven from approximately 800 feet on the existing decline. As of the end of
December 1996, the new decline has been driven starting from approximately
350 feet with an additional 450 feet expected to be completed by the end of
March 1997. Ore is expected to begin to be milled in May 1997.
Previously, the Company had an interest in a gold producing property in
Bolivia, South America and mining claims in British Columbia, Canada. The
management, directors and stockholders voted to release these properties as
they felt they were not economical to the Company and the future exploration
and development of the Nevada, Indonesian and Brazil properties would offer
the greatest return to the Company (see Note 7).
F-12
<PAGE> 48
NEVADA MANHATTAN MINING INCORPORATED
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
3. LONG-TERM DEBT AND NOTES PAYABLE
Notes payable to stockholders accrue interest at rates from 9 percent to 12
percent, are due on demand and are guaranteed by certain Company officers.
Long-term debt consisted of the following:
<TABLE>
<CAPTION>
FEBRUARY 28, MAY 31,
------------ -----------------------
1997 1996 1995
---- ---- ----
(unaudited)
<S> <C> <C> <C>
Obligation to a stockholder as a result of a
lawsuit settlement, interest imputed at 9%,
payable $1,000 per month until April 2001 $ 48,426 $ 50,770 $ 52,330
Note payable to an individual at $2,000 per
month, including interest at 9% 35,649 -- --
10% note payable to an individual under
terms of a joint venture agreement,
payable $50,000 per year including interest 84,341 109,341 76,867
-------- -------- --------
168,416 160,111 129,197
Current portion 68,150 44,388 23,278
-------- -------- --------
Long-term debt $100,266 $115,723 $105,919
======== ======== ========
</TABLE>
Maturities of long-term debt are as follows for the years ending May 31:
<TABLE>
<S> <C>
1997 $44,388
1998 48,925
1999 40,978
2000 10,267
2001 15,553
</TABLE>
The Company has capitalized $26,693, $34,242, $82,906 and $74,543 of interest
into the mining properties during the years ended May 31, 1996, 1995 and 1994
and for the period ended February 28, 1997, respectively.
F-13
<PAGE> 49
NEVADA MANHATTAN MINING INCORPORATED
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
4. COMMITMENTS AND CONTINGENCIES
Lease
The Company leases office space under terms of an operating lease expiring on
February 28, 1997. Future minimum lease payments for the year ending May 31,
1997 are $20,394. Rent expense amounted to $20,726, $20,394, $21,922 and
$18,621 for the years ended May 31, 1996, 1995 and 1994, and the period ended
February 28, 1997, respectively.
Securities and Exchange Commission
During May 1989, the Company received notice that the Securities and Exchange
Commission ("Commission") had commenced an investigation into the Company's
business activities. In 1993, the Board of Directors of the Company
determined that the entry of a proposed consent judgment and the termination
of the investigation was in the best interest of the Company and received
confirmation that the investigation had been completed.
On March 19, 1994, the Company received the following "Stipulation Regarding
Resolution of Outstanding Issues" from the Commission closing out the
investigation and all related issues:
"Whereas the disposition of funds analysis conducted pursuant to the
Judgment of Permanent Injunction and Other Relief against Defendant Nevada
Manhattan Mining Incorporated entered on August 3, 1993 has revealed no
ill-gotten gains received by any defendant, the undersigned parties hereby
stipulate that all outstanding issues in this action have been resolved,
including disgorgement, and that the judgment entered against the
defendants are final."
While the Company believes that it was in the best interests of the Company
and its stockholders to enter the consent judgment, the entry of the judgment
may impose certain burdens on the Company with respect to its future
activities. The more significant of such burdens are as follows:
(i) The Company may not be able to utilize the exemptions from
registration available under Regulation A and Rule 701 under the 1933 Act.
(ii) The Company may not be able to rely on the private placement
exemptions provided in various state securities laws in connection with
the offer and sale of securities in a transaction which qualifies as an
exempt sale of securities under the 1933 Securities Act.
F-14
<PAGE> 50
NEVADA MANHATTAN MINING INCORPORATED
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
4. COMMITMENTS AND CONTINGENCIES (CONTINUED)
Securities and Exchange Commission (Continued)
In such case, the Company would be required to qualify the transaction under
the state securities laws which may not be available. This qualification
would increase the cost of, and extend the time for completing, such private
placement of securities.
Other Contingencies
In January 1995, a group of stockholders and creditors asserted a claim in
regards to a January 1988 settlement agreement. The Company has not been
formally served or any legal process initiated by the stockholders and
creditors in asserting this claim. Management does not believe the ultimate
outcome of this contingency will have a material effect on financial position
or results of operations.
5. STOCKHOLDERS' EQUITY
Stock Options
The Company has granted stock options to all members of the Board of
Directors in the amount of 10,000 shares per full year of service as an
active member of the Board of Directors. The exercise price of options
granted is $1.00 per share of common stock. Options may not be exercised
after expiration of ten (10) years from the date of grant and are
non-transferable other than by will or inheritance. These options are the
only compensation received for service as Director.
The following table sets forth information regarding options for the periods
ended:
<TABLE>
<CAPTION>
FEBRUARY 28, MAY 31,
------------ --------------
1997 1996 1995
---- ---- ----
(unaudited)
<S> <C> <C> <C>
Outstanding at beginning of period 240,000 190,000 160,000
Granted - 50,000 30,000
------- -------- --------
Outstanding at end of period 240,000 240,000 190,000
======= ======= =======
</TABLE>
In connection with their employment contracts, the Company also granted two
officers the right to purchase 900,000 common shares each at an average price
of $1.50 per share. The officers exercised these options during the year
ended May 31, 1996 and the Company's
F-15
<PAGE> 51
NEVADA MANHATTAN MINING INCORPORATED
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
5. STOCKHOLDERS' EQUITY (CONTINUED)
Board of Directors then agreed to give the officers the shares for services
rendered. These shares have been valued at $.25 per share ($450,000) in the
accompanying financial statements.
The Company has also granted its chief legal counsel an option to acquire
100,000 common shares at $4 per share.
Reverse Split
In February 1995, the Company's stockholders approved a one-for-ten reverse
split of the Company's common stock. The stated par value per share was not
changed. All share and per share amounts herein have been retroactively
restated to reflect the reverse split.
Stock to be Issued and Stock Subscriptions Receivable
The Company sold 647,213 shares of common stock and 13,150 shares of Series A
Preferred Stock in separate private placements during the year ended May 31,
1995. The preferred stock had not been formally issued as of May 31, 1995,
but was issued during the year ended May 31, 1996. The Company raised
$776,513 in the private placements of which $50,500 was still receivable at
May 31, 1995 and has been reflected as an offsetting amount in stockholders'
equity at that date.
During the year ended May 31, 1995, the Company also agreed to issue 73,467
shares of common stock in exchange for conversion of $638,660 of notes
payable to certain individuals.
During the year ended May 31, 1995, the Company also agreed to issue 32,500
shares of common stock to certain individuals to settle certain claims made
by the individuals. The $32,500 value of the shares was charged to general
and administrative expense.
The preferred stock has a $1 par value, a $10 liquidation preference and an 8
percent cumulative dividend payable in cash or kind. Each share is
convertible to ten common shares for a period of thirty months.
During 1988, two Company officers loaned 495,000 (post-reverse split) common
shares to the Company as treasury stock in return for the Company's promise
to return the shares when common shares became available as a result of a
reverse split or an increase in authorized shares. The shares were reissued
to the officers in November 1995. The Company has accounted for the shares,
valued at the market price of the shares when they were loaned to
F-16
<PAGE> 52
NEVADA MANHATTAN MINING INCORPORATED
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
5. STOCKHOLDERS' EQUITY (CONTINUED)
Stock to be Issued and Stock Subscriptions Receivable (Continued)
the Company, as a long-term obligation in the financial statements until the
year ended May 31, 1995, when the reverse split occurred and the shares
became available for issuance. At that time, the obligation was considered as
common stock to be issued and included in stockholders' equity.
Warrants
In connection with the private placement of common stock, in October 1994,
the Company also issued warrants to purchase 50,300 shares of common stock at
$1.00 per share. None of these warrants, which expire in October 1996, have
been exercised as of May 31, 1996.
6. INCOME TAXES
The Company has recorded no income tax benefit, nor has deferred taxes in any
year due to a net operating loss carryforward amounting to approximately
$10,000,000 at May 31, 1996, which will expire, if not utilized, from 2002 to
2011.
7. SUBSEQUENT EVENTS
In March 1997, the Company entered into a Sale and Purchase Agreement with
the Selig Entities. Under the terms of this latest agreement, the Selig
Entities agreed to sell to the Company one hundred percent (100%) of their
interests in the Nevada Note, the Deed of Trust, and the Nevada Property for
the sum of Three Hundred Seventy Five Thousand Dollars ($375,000) payable as
follows: One Hundred Thousand Dollars ($100,000) in March 1997 and the
balance plus all accrued and unpaid interest (calculated at the rate of
5.25%) on or before February 6, 1999. The Company in fact paid the first
installment of One Hundred Thousand Dollars ($100,000) in March 1997. The
agreement also acknowledges that the Company is the only person or entity
legally entitled to conduct mineral operations on the Nevada Property. The
Company is also required to pay all U.S. Bureau of Land Management annual
maintenance fees associated with the claims comprising the Nevada Property.
Indonesia
The Company has made certain acquisitions in Indonesia subsequent to May 31,
1996:
On August 19, 1996, the Company entered into an agreement to acquire a 51%
interest in a metals/minerals mining property in Kalimantan, Indonesia
(Sopang Gold Concession). Consideration for the purchase consisted of 400,000
shares of common stock due upon the signing of the agreement (of which
10,800 are unissued as of February 28, 1997) and an additional 4,000,000
shares to be released dependent upon the value of an independent valuation of
the property. The Company has valued the 400,000 shares at $1,200,000.
The Sopang Gold Concession ("Sopang") consists of 16,480 hectares and is held
under Indonesian title as a KP, a form of Indonesian citizen ownership with a
joint venture agreement. The concession is located in southeast Kalimantan.
Because of the lack of major infrastructure in the area, initial work will be
limited to surface trenching and geochemical sampling. Field work at Sopang
will be initiated in the first quarter of 1997 with more extensive
exploration including airborne geophysical surveys and drilling to be
initiated later in 1997.
F-17
<PAGE> 53
NEVADA MANHATTAN MINING INCORPORATED
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
7. SUBSEQUENT EVENTS (CONTINUED)
Indonesia
The West Kalimantan Gold Project ("West Kalimantan") is 75 kilometers south
of the Sarawak region of Malaysia and contains 62 hectares with the intent to
expand to at least 2,000 hectares. The Project is held under a KPPE title, a
form of Indonesian citizen ownership in joint venture with the Company.
Access to the property is by road and motorized canoe for initial field work
and helicopter support for advanced exploration activities. Infrastructure is
limited but the proximity to the west coast of Kalimantan and low relief
terrain indicates no unusual development problems will be encountered.
Following a survey and additional ground sampling, key core drill targets
will be identified and drilling will start as early as the second quarter of
1997. Further property acquisition is an integral part of the development
program at West Kalimantan. Exploration has commenced in the first quarter
of 1997.
The Cepa Coal Project ("Cepa") in East Kalimantan covers an area of
approximately 286,000 hectares and is held in three concessions as Contracts
of Work ("COW's"). Initial work on the property will include reasonable
expansion of ownership to include promising additional property containing
similar coal. Surface sampling, shallow drilling for coal characterization
and general market surveys began in the first quarter of 1997. The
Silobat and Cepa projects, collectively, were acquired in January 1997 for
400,000 common shares issued upon signing of the agreement (valued at
$2,800,000) and an additional 4,000,000 shares to be released dependent upon
an independent valuation of the property of $40,000,000. The Company is also
contingently liable to issue 1,000,000 common shares regardless of the
valuation.
The Company has contractually acquired the controlling interest in five
additional gold concessions in Indonesia. The Company is currently reviewing
these properties to determine an applicable acquisition structure.
The Company has retained the firm of Behre Dolbear & Co. to provide review
and third party validation with respect to its Indonesian operations.
Brazil
The Company, through its 80% owned subsidiary, Equatorial Resources ("ER"),
has entered into a joint venture agreement with a Brazilian company to
develop and operate 276,000 hectares of virgin timberland located in the
state of Para, Brazil. The Company has an option to buy an additional 420,000
hectares. Under this joint venture arrangement, ER will manage the property
and will earn a fifty percent interest in all
F-18
<PAGE> 54
NEVADA MANHATTAN MINING INCORPORATED
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
7. SUBSEQUENT EVENTS (CONTINUED)
Brazil (Continued)
operations, including timber harvesting and milling activities currently
being conducted on the property. Of the four existing saw mills acquired by
ER, two are operational in Phase I and Phase II, and the other two mills will
be put into operation by the end of February 1997. Immediate expansion plans
call for the construction of up to eight additional mills in Phase III.
The Company is providing $500,000 for Phase I and Phase II and will provide
$1,500,000 for Phase III. In addition to the cash capital requirements for
the property, the Company has issued 100,000 shares (valued at $700,000) and
is required to issue 2,000,000 shares of common stock to the seller in 1997
upon closing of a stock-for-assets reorganization agreement.
8. GEOGRAPHIC AND SEGMENT INFORMATION
The Company's operations during the three years ended May 31, 1996 were
entirely gold mining operations in the United States. Beginning in the nine
months ended February 28, 1997, the Company began operating in Indonesia
(gold mining and coal) and Brazil (timber). Financial data by geographic area
as of and for the period ended February 28, 1997 were as follows:
<TABLE>
<CAPTION>
(Unaudited)
Operating Identifiable
Loss Assets
----------- -----------
<S> <C> <C>
United States $(1,105,472) $ 5,659,169
Indonesia (79,955) 4,123,147
Brazil (134,332) 947,500
----------- -----------
Total $(1,319,759) $10,729,816
=========== ===========
</TABLE>
F-19
<PAGE> 55
SIGNATURES
Pursuant to the requirements of Section 12 of the Securities Exchange Act
of 1934, the registrant has duly caused this registration statement to be
signed on its behalf by the undersigned, thereunto duly authorized.
Nevada Manhattan Mining Incorporated
Date: April 3, 1997
By: /s/ Jeffrey S. Kramer
-----------------------------------
Senior VP, CFO and Director
<PAGE> 56
All of the above-referenced sales were made by the Company in reliance upon the
exemptions from registration contained in Section 4(2) of the Securities Act of
1933 and Regulation D promulgated pursuant to such exemption.
13. EXHIBITS
EXHIBIT
NUMBER DESCRIPTION OF EXHIBIT
- - ------- ----------------------
3.(i) Articles of Incorporation of Epic Enterprises, Ltd., Filed June 10,
1985+
3.(ii) Certificate of Amendment to Articles of Incorporation of Epic
Enterprises, Ltd., Filed September 11, 1987+
3.(iii) Certificate of Amendment to Articles of Incorporation of Nevada
Manhattan Mining Incorporated Filed October 26, 1987+
3.(iv) Certificate of Amendment of Articles of Incorporation of Nevada
Manhattan Mining Incorporated Filed August 31, 1995+
3.(v) Certificate of Determination of Preferences of Series A Preferred
Stock of Nevada Manhattan Mining Incorporated Filed October 25, 1995+
3.(vi) Bylaws of Epic Enterprises, Ltd.+
3.(vii) Memorandum and Articles of Association of Equatorial Resources, ltd.
3.(viii) Memorandum and Articles of Association of Kalimantan Resources, Ltd.
4.(i) Pages 1, 3, 4, and 5 of the Bylaws of Epic Enterprises, Ltd.+
4.(ii) Pages 1 through 9 of Certificate of Determination of Preferences of
Series A Preferred Stock of Nevada Manhattan Mining Incorporated
Filed October 25, 1995+
4.(iii) Stock Options Issued to Directors
10.(i) Mining Agreement Dated April 4, 1987+
10.(ii) Amendment to Mining Agreement Dated December 9, 1987+
10.(iii) Manhattan Mining Property Agreement Dated March 2, 1989+
10.(iv) Corporation Quitclaim Deed Filed March 9, 1989+
10.(v) Deed of Trust and Assignment of Rents Recorded March 9, 1989+
10.(vi) Joint Venture Agreement Dated June 1993+
10.(vii) Letter Agreement Dated August 10, 1995+
10.(viii) Amendment to Joint Venture Agreement Dated October 20, 1995+
10.(ix) Contract Between Nevada Manhattan Mining, Inc, and Harrison Western
Construction Corp.+
10.(x) Principles of Agreement Dated August 19, 1996+
10.(xi) Employment Agreement Dated January 1, 1995 with Christopher D.
Michaels+
10.(xii) Employment Agreement Dated January 1, 1995 with Jeffrey Kramer+
10.(xiii) Consulting Agreement with Gold King Mines Corporation Dated April 1,
1995+
10.(xiv) Consulting Services Agreement Dated October 7, 1996 with Behre
Dolbear & Company, Inc.+
10.(xv) Letter Agreement Dated March 25, 1996 with David Weissberg, M.D.+
10.(xvi) Letter Agreement Dated May 13, 1996 with David Weissberg, M.D.+
10.(xvii) Letter Agreement Dated September 25, 1996 with Mr. John Holsten+
10.(xviii) Financial Advisory Agreement with Rhone Finance SA dated November
26, 1996+
10.(xix) Addendum Agreement to Principles of Agreement
10.(xx) Acquisition Agreement by and between Sinkamas Agunbg Ltd. and
Kalimantan Resources, Ltd. dated January 26, 1997
10.(xxi) Acquisition Agreement for Gold and Coal Concessions by and between
Kalimas Jaya Ltd. and Kalimantan Resources, Ltd.
10.(xxii) November 11, 1996 letter Agreement with Maderia Intex, S.A.
International Exporte
10.(xxiii) Proposal for Sale and Purchase and Authorization for Exploration of
Timber
10.(xxiv) Eco-Rating Standard Agreement dated December 17, 1996
10.(xxv) Sale and Purchase Agreement dated February 6, 1997
<PAGE> 57
EXHIBIT
NUMBER DESCRIPTION OF EXHIBIT
- - ------- ----------------------
21 Subsidiaries of the Company
27 Financial Data Schedule+
99(i) Business Plan Dated July 1995+
99(ii) Business Plan Dated January 1997
- - -------------------------------------------------------------------------------
+ Incorporated by reference to the Company's Registration Statement on Form
SB-2 filed December 6, 1997 (Registration No. 333-17423).
<PAGE> 1
I.B.C.NO. 209544
TERRITORY OF THE BRITISH VIRGIN ISLANDS
THE INTERNATIONAL BUSINESS
COMPANIES ORDINANCE (CAP 291)
MEMORANDUM
AND
ARTICLES OF ASSOCIATION
OF
EQUATORIAL RESOURCES, LTD.
INCORPORATED on the 13th day of December, 1996
DANTRUST LIMITED
P.O. BOX 186
Road Town, Tortola
Virgin Islands
[SEAL]
<PAGE> 2
TERRITORY OF THE BRITISH VIRGIN ISLANDS
THE INTERNATIONAL BUSINESS COMPANIES ORDINANCE
(Cap 291)
MEMORANDUM OF ASSOCIATION
OF
EQUATORIAL RESOURCES, LTD.
1. The name of the Company is EQUATORIAL RESOURCES, LTD.
2. The registered office of the Company will be situate at the offices of
Dantrust Limited, Road Town, Tortola, British Virgin Islands or at such
place in the British Virgin Islands as the directors may from time to
time determine.
3. The registered agent of the Company will be Dantrust Limited or such
other person or company being a person or company entitled to act as a
registered agent as the directors may from time to time determine.
4. The Objects for which the Company is established are:-
(1) To buy, sell, mortgage, lease, manage, build, develop,
possess and generally deal in real properties; to buy, sell,
underwrite, invest in, exchange or otherwise acquire, and to
hold, manage, develop, deal with and turn to account any
bonds, debentures, shares (whether fully paid or not),
stocks, options, commodities, futures, forward contracts,
notes, or securities of all types, precious metals, gems,
works of art and other articles of value.
(2) To borrow or raise money by the issue of debentures, debenture
stock (perpetual or terminable), bonds, mortgages, or any
other securities founded or based upon all or any of the
assets or property of the Company or without any such security
and upon such terms as to priority or otherwise as the Company
shall think fit.
(3) To guarantee loans and to lend money with or without guarantee
or security to any persons, firms or corporations.
(4) To engage in any other business or businesses whatsoever, or
in any acts or activities, which are not
[SEAL]
<PAGE> 3
prohibited under any law for the time being in force in the
British Virgin Islands.
(5) To do all such other things as are incidental to or the
Company may think conducive to the attainment of all or any
of the above objects.
And it is hereby declared that the intention is that each of the objects
specified in each paragraph of this clause shall, except where otherwise
expressed in such paragraph, be an independent main object and be in no wise
limited or restricted by reference to any inference from the terms of any other
paragraph or the name of the Company.
5. The Company has no power to:-
(1) carry on business with persons resident in the British Virgin
Islands;
(2) own an interest in real property situate in the British Virgin
Islands, other than a lease of property for use as an office
from which to communicate with members or where books and
records of the company are prepared or maintained.
(3) carry on banking or trust business, unless it is licensed
under the Banks and Trust Companies Act, 1990;
(4) carry on business as an insurance or re-insurance company,
insurance agent or insurance broker, unless it is licensed
under an enactment authorizing it to carry on that business;
(5) carry on the business of company management unless it is
licensed under the Company Management Act, 1990; or
(6) carry on the business of providing the registered office or
the registered agent for companies incorporated in the British
Virgin Islands.
6. The shares in the Company shall be issued in the currency of the
United States of America.
7. The authorized capital of the Company is US$50,000.00 divided into
25,000 Class A preferred voting shares with a par value of US$1.00 each
and 25,000 Class B common non-voting shares with a par value of US$1.00
each. The shares of the Company are
[SEAL]
<PAGE> 4
subject to the following preferences, rights and restrictions namely:
(i) The holders of the Class A preferred voting shares shall not
be entitled to repayment of capital in priority to the holders
of Class B shares and shall not be entitled to participate in
the surplus assets of the Company after repayment of capital
and shall not be entitled to the receipt of dividends.
(ii) The Class B common non-voting shares shall not carry the right
to attend or vote at meetings of the members of the Company or
the right to receive notice thereof, or the right to appoint
or remove directors of the Company.
8. The shares shall be further divided into such number of classes and
series as the directors shall by resolution to amend this Memorandum of
Association from time to time determine and until so divided shall
comprise the classes above mentioned.
9. The directors shall by resolution have the power to issue any class or
series of shares that the Company is authorized to issue in its
capital, original or increased, with or subject to any designation,
powers, preferences, limitations and restrictions.
10. The directors may issue shares as registered or as shares issued
to bearer as they may determine by resolution of the directors.
11. Shares issued as registered shares may be exchanged for shares
issued to bearer, and shares issued to bearer may be exchanged for
registered shares.
12. Where shares are issued to bearer, the bearer, identified for this
purpose by the number of the share certificate, shall be requested
to give to the Company the name and address of an agent or
attorney for service of any notice, information or written
statement required to be given to members, and service upon such
agent or attorney shall constitute service upon the bearer of such
shares. In the absence of such name and address being given it
shall be sufficient for purpose of service for the Company to
publish the notice, information or written statement in one or
more newspapers published or circulated in the British Virgin
Islands in a newspaper in the place where the Company has its
principal office.
[SEAL]
<PAGE> 5
13. The Company shall by resolution of the directors have the power to
amend or modify any of the conditions contained in this Memorandum
of Association.
Dantrust Limited hereby subscribe to this Memorandum of Association
this 13th day of December, 1996.
Signed on behalf of the subscriber Dantrust Limited:
by: /s/
in the presence of: /s/
Witness
[SEAL]
<PAGE> 6
TERRITORY OF THE BRITISH VIRGIN ISLANDS
THE INTERNATIONAL BUSINESS COMPANIES ACT
(CAP.291)
CERTIFICATE OF INCORPORATION (SECTIONS 14 AND 15)
No. 209544
The Registrar of Companies of the British Virgin Islands HEREBY CERTIFIES
pursuant to the International Business Companies Act, Cap. 291 that all the
requirements of the Act in respect of incorporation having been satisfied,
EQUATORIAL RESOURCES, LTD.
is incorporated in the British Virgin Islands as an International Business
Company this 13th day of December, 1996.
[SEAL] Given under my hand and seal at
Road Town, in the Territory of the
British Virgin Islands
/s/
REGISTRAR OF COMPANIES
<PAGE> 7
TERRITORY OF THE BRITISH VIRGIN ISLANDS
THE INTERNATIONAL BUSINESS COMPANIES ORDINANCE
(Cap 291)
ARTICLES OF ASSOCIATION
OF
EQUATORIAL RESOURCES, LTD.
PRELIMINARY
1. References in these Regulations to the Ordinance shall mean the
International Business Companies Ordinance 1984. The following
regulations shall constitute the Regulations of the Company. In
these Regulations words and expressions defined in the Ordinance
shall have the same meaning and, unless otherwise required by the
context, the singular shall include the plural and vice versa, the
masculine shall include the feminine and neuter and references to
persons shall include corporations and all legal entities capable
of having a legal existence.
SHARE CERTIFICATES
2. Every person whose name is entered as a member in the share
register being the holder or registered shares, and every person
who subscribes for shares issued to bearer, shall without payment,
be entitled to a certificate signed by two directors or two
officers or by one director and one officer of the Company or
under the common seal of the Company with or without the signature
of any director or officer of the Company specifying the share or
shares held and the par value thereof, provided that in respect of
a registered share, held jointly by several persons the Company
shall not be bound to issue more than one certificate, and
delivery of a certificate for a share to one of several joint
holders shall be sufficient delivery to all.
3. In the case of bearer shares each certificate for shares issued to
bearer shall carry an identifying number, and the Company shall
maintain a register of the name and address of an agent or attorney
which may be given to the Company by the bearer, identified for this
purpose by such identifying statement required to be given to members.
4. If a certificate is worn out or lost it may be renewed on
production of the worn out certificate, or on satisfactory proof
of its loss together with such indemnity as the directors may
reasonably require. Any member receiving a share certificate
shall indemnify and hold the Company and its officers harmless
from any loss or liability which it or they may incur by reason of
wrongful or fraudulent use or representation made by any person by
virtue of the possession of such certificate.
[SEAL]
<PAGE> 8
SHARE CAPITAL AND VARIATION OF RIGHTS
5. Subject to the provisions of these Regulations, the unissued and
treasury shares of the Company shall be at the disposal of the
directors who may without limiting or affecting any rights
previously conferred on the holders of any existing shares or
class or series of shares, offer, allot grant options over or
otherwise dispose of them to such persons at such times and upon
such terms and conditions as the Company may, by resolution of
directors, determine.
6. Without prejudice to any special rights previously conferred on the
holders of any existing shares or class of shares, any class of shares
that the Company is authorized to issue in its capital may be issued
with such preferred, deferred or other special rights or such
restrictions, whether in regard to dividend, voting, return of capital
or otherwise as the directors by resolution may from time to time
determine.
7. Subject to the provisions of the Ordinance in this regard, shares may
be redeemed without the consent of the member or members concerned on
such terms and in such manner as the directors before or at the time of
the issue of the shares may determine.
8. The directors may redeem any such share at a premium subject to
the Provisions of the Ordinance.
9. If at any time the share capital is divided into different classes
of shares, the rights attached to any class (unless otherwise
provided by the terms of issue of the shares of that class) may,
whether or not the Company is being wound up, be varied with the
consent in writing of the holders of not less than three-fourths
of the issued shares of that class and the holders of not less
than three-fourths of the issued shares of any other class of
shares which may be affected by such variation.
10. The rights conferred upon the holders of the shares of any class issued
with preferred or other rights shall not, unless otherwise expressly
provided by the terms of issue of the shares of that class, be deemed
to be varied by the creation or issue of further shares ranking pari
passu therewith.
11. The Company shall not be bound by or be compelled in any way to
recognize (even when having notice thereof) any equitable contingent,
future or partial interest in any share or any interest in any
fractional part of a share or (except only as by these Regulations or
by law otherwise provided) any other rights thereto by the registered
holder or holders.
[SEAL]
<PAGE> 9
TRANSFER OF SHARES
12. Registered shares in the Company may be transferred by a written
instrument signed by the transferor and containing the name and address
of the transferee or in such other manner or form and subject to such
evidence as the directors shall consider appropriate. Shares issued to
bearer shall be transferred by delivery of the certificate evidencing
same.
13. The holder of registered shares may request that such shares be
exchanged for shares issued to bearer and the directors shall cancel
the certificate evidencing registered shares and the entry in the share
register and instead issue a certificate evidencing shares issued to
bearer with and subject to such evidence of intent as the directors may
consider appropriate.
14. The holder of a certificate evidencing shares issued to bearer may
request that such shares be exchanged for registered shares and the
directors shall cancel the certificate evidencing shares issued to
bearer and instead issue a certificate evidencing registered shares and
enter the name and address of the holder thereof in the share register
with and subject to such evidence of intent as the directors may
consider appropriate.
15. Upon receipt of notification of any change of name and address of any
agent or attorney given to the Company for the purpose of service of
any notice, information or written statement required to be given to
members, identified by reference to the number of the certificate to
bearer, the directors shall forthwith amend the register maintained for
this purpose.
TRANSMISSION OF SHARES
16. The personal representatives, guardian or trustee as the case may
be of a deceased, incompetent or bankrupt sole holder of a
registered share shall be the only persons recognized by the
Company as having any title to the share. In the case of a share
registered in the names of two or more holders, the survivor or
survivors, and the personal representative, guardian or trustee as
the case may be of the deceased, incompetent or bankrupt, shall be
the only persons recognized by the Company as having any title to
the share but they shall not be entitled to exercise any rights as
a member of the Company until they have proceeded as set forth in
the following two Regulations.
17. Any person becoming entitled by operation of law or otherwise to a
share or shares in consequence of the death, incompetence or
bankruptcy of any member may be registered
[SEAL]
<PAGE> 10
as a member upon such evidence being produced as may reasonably be
required by the directors. An application by any such person to be
registered as a member for all purposes shall be deemed to be a
transfer of shares of the deceased, incompetent or bankrupt member and
the directors shall treat it as such.
18. Any person who has become entitled to a share or shares in consequence
of the death, incompetence or bankruptcy of any member may, instead of
being registered himself, request in writing that some person to be
named by him be registered as a transferee of such share or shares and
such request shall likewise be treated as if it were a transfer.
ACQUISITION OF OWN SHARES
19. Subject to provisions of the Ordinance in this regard, the directors
may, on behalf of the Company, purchase, redeem or otherwise acquire
any of the Company's own shares for such consideration as they consider
fit, and either cancel or hold such shares as treasury shares. Shares
may be purchased or otherwise acquired in exchange for newly issued
shares in the Company.
20. Subject to the provisions of the Ordinance in this regard, the
directors may, on behalf of the Company, at any time forfeit and
cancel the shares for which payment is not made pursuant to a
promissory note or other written binding obligation for payment of
a debt, provided that written notice specifying a date for payment
to be made is served on the member who defaults in making payment
pursuant to the promissory note or other binding obligation to pay
a debt, naming a further date not earlier than 14 days from the
date of service of the notice, on or before which the payment
required by the notice is to be made, and containing a statement
that in the event of non-payment at or before the time named in
the notice, the shares, or any of them, in respect of which the
payment is not made will be liable to forfeiture, and the
requirements of the notice are not complied with.
ALTERATION IN CAPITAL
21. Subject to the terms of any resolution to amend the Memorandum of
Association passed by the members or directors for the purpose of
increasing the authorized capital of the Company, such increased
capital may be divided into shares or classes of share of such
respective amounts, and with such rights or privileges (if any) as the
members or directors think expedient.
22. Any capital raised by the creation of new shares shall be considered as
part of the original capital, and shall be
[SEAL]
<PAGE> 11
subject to the same provisions as if it had been part of the original
capital.
23. The members or directors may be resolution to amend the Memorandum
of Association:-
(a) consolidate and divide all or any of its share capital into
shares of larger amounts than its existing shares;
(b) cancel any shares which, at the date of the passing of the
resolution, have not been taken or agreed to be taken by any
person and diminish the amount of its authorized share capital
by the amount of the shares so cancelled;
(c) sub-divide its shares or any of them into shares of smaller
amounts than is fixed by the Memorandum of Association so
that subject to the provisions of Regulation 9 the resolution
whereby any share is sub-divided may determine that as
between the holders of the different classes of shares (if
any) resulting from such sub-division one or more of the
classes of shares may have such preferred or other special
rights over, or may have such qualified or deferred rights or
be subject to any such restrictions as compared with, the
other class or classes as the Company has power to attach to
unissued or new shares;
(d) subject to any determination required by law, reduce its
authorized and issued share capital.
24. Where any difficulty arises in regard to any consolidation and
division under these Regulations the members or directors may
settle the same as they think expedient.
MEETING OF MEMBERS
25. The directors may convene meetings of the members of the Company at
such times and in such manner and places as the directors consider
necessary or desirable, and they shall convene such a meeting upon the
written request of members holding more than 50 percent of the votes of
the outstanding voting shares in the Company.
26. Seven days' notice at the least specifying the place, the day and the
hour of the meeting and the general nature of the business to be
conducted shall be given in manner hereinafter mentioned to such person
whose names on the date the notice is given appear as members in the
share register of the Company and to the agent or attorney of record of
the holders of bearer shares.
[SEAL]
<PAGE> 12
27. A meeting of the members shall be deemed to have been validly held,
notwithstanding that it is held in contravention of the requirement to
give notice in Regulation 26, if notice of the meeting is waived by an
absolute majority in number of the members or holders of bearer shares
having a right to attend and vote at the meeting.
28. The inadvertent failure of the directors to give notice of a meeting to
a member or to the agent or attorney as the case may be, or the fact
that a member or such agent or attorney has not received the notice,
does not invalidate the meeting.
PROCEEDINGS AT MEETINGS OF MEMBERS
29. No business shall be transacted at any meeting unless a quorum of
members is present at the time when the meeting proceeds to business. A
quorum shall consist of the holder or holders present in person or by
proxy of not less than one-third of the shares of each class or series
of shares entitled to vote as a class or series thereon and the same
proportion of the votes of the remaining shares entitled to vote
thereon.
30. If within an hour from the time appointed for the meeting a quorum is
not present, the meeting shall be dissolved.
31. At every meeting the members present shall choose some one of their
number to be the Chairman. If the members are unable to choose a
Chairman for any reason, then the person representing the greatest
number of voting shares present at the meeting shall preside as
Chairman failing which the oldest individual person shall take the
chair.
32. The Chairman may, with the consent of the meeting, adjourn any meeting
from time to time, and from place to place, but no business shall be
transacted at any adjourned meeting other than the business left
unfinished at the meeting from which the adjournment took place.
33. At any meeting a resolution put to the vote of the meeting shall be
decided on a show of hands by simple majority unless a poll is (before
or on the declaration of the result of the show of hands) demanded:-
(a) by the Chairman; or
(b) by any member or members present or by proxy and representing
not less than one-tenth of the total voting rights of all the
members having the right vote at the meeting.
[SEAL]
<PAGE> 13
34. Unless a poll be so demanded, a declaration by the Chairman that a
resolution has, on a show of hands, been carried, and an entry to that
effect in the book containing the minutes of the proceedings of the
Company, shall be sufficient evidence of the fact, without proof of the
number or proportion of the votes recorded in favor of or against such
resolution.
35. If a poll is duly demanded it shall be taken in such manner as the
Chairman directs, and the result of the poll shall be deemed to be the
resolution of the meeting at which the poll was demanded. The demand
for a poll may be withdrawn.
36. In the case of an equality of votes, whether on a show of hands, or on
a poll the Chairman of the meeting at which the show of hands takes
place, or at which the poll is demanded, shall be entitled to a second
or casting vote.
VOTES OF MEMBERS
37. At any meeting of members whether on a show of hands or on a poll every
holder of a voting share present in person or by proxy shall have one
vote for every voting share of which he is the holder.
38. A resolution which has been notified to all members for the time being
entitled to vote and which has been approved by a majority of the votes
of those members in the form of one or more documents in writing or by
telex, telegram, cable or other written electronic communication shall
forthwith, without the need for any notice, become effectual as a
resolution of the members.
39. If a committee be appointed for any member who is of unsound mind he
may vote by his committee.
40. If two or more persons are jointly entitled to a registered share or
shares:-
(a) each of them may be present in person or by proxy at a
meeting of members and may speak as a member;
(b) if only one of them is present in person or by proxy, he may
vote on behalf of all of them; and
(c) if two or more are present in person or by proxy, they must
vote as one.
41. Votes may be given either personally or by proxy.
42. The instrument appointing a proxy shall be produced at the place
appointed for the meeting before the time for holding the meeting at
which the person named in such instrument
[SEAL]
<PAGE> 14
proposes to vote.
43. The instrument appointing a proxy shall be in such form as the Chairman
of the meeting shall accept as properly evidencing the wishes of the
member appointing the proxy.
44. The instrument appointing a proxy shall be in writing under the hand of
the appointer unless the appointer is a corporation or other form of
legal entity other than one or more individuals holding as joint owners
in which case the instrument appointing a proxy shall be in writing
under the hand of an individual duly authorized by such corporation or
legal entity to execute the same. The Chairman of any meeting at which
a vote is cast by proxy so authorized may call for a notarially
certified copy of such authority which shall be produced within 7 days
of being so requested or the vote or votes cast by such proxy shall be
disregarded. In the case of a proxy being given by the holder of a
share issued to bearer, it shall be sufficient for the appointer to
identify himself by writing the identifying number of the certificate
evidencing the shares issued to bearer.
CORPORATIONS ACTING BY REPRESENTATIVES AT MEETINGS
45. Any corporation or other form of corporate legal entity which is a
member of the Company may by resolution of its directors or other
governing body authorize such person as it thinks fit to act as its
representative at any meeting of the members or of any class of members
of the Company, and the person so authorized shall be entitled to
exercise the same powers on behalf of the corporation which he
represents as that corporation could exercise if it were an individual
member of the Company.
DIRECTORS
46. Subject to any subsequent amendment to change the number of directors,
the number of the directors shall be not less than one or more than
seven.
47. The first director or directors shall be elected by the subscriber(s)
to the Memorandum. Thereafter, the directors shall be elected by the
members or directors for such term as the members or directors may
determine and may be removed by the members or the directors.
48. Each director holds office until his successor takes office or until
his earlier death, resignation or removal.
49. A vacancy in the board of directors may be filled by a resolution of
members of a majority of the remaining directors.
[SEAL]
<PAGE> 15
50. Until directors are appointed the subscribers to the Memorandum of
Association shall have the power to act as directors.
51. A director shall not require a share qualification, but nevertheless
shall be entitled to attend and speak at any meeting of the members and
at any separate meeting of the holders of any class of shares in the
Company.
52. A director by writing under his hand deposited at the Registered Office
of the Company may from time to time appoint another director or any
other person to be his alternate. Every such alternate shall be
entitled to be given notice of meetings of the directors and to attend
and vote as a director at any such meeting at which the director
appointing him is not personally present and generally at such meeting
to have and exercise all the powers, rights, duties and authorities of
the director appointing him. Every such alternate shall be deemed to be
an officer of the Company and shall not be deemed to be an agent of the
director appointing him. If undue delay or difficulty would be
occasioned by giving notice to a director of a resolution of which his
approval is sought in accordance with Regulation 77 his alternate (if
any) shall be entitled to signify approval of the same on behalf of
that director. The remuneration of an alternate shall be payable out of
the remuneration payable to the director appointing him, and shall
consist of such portion of the last- mentioned remuneration as shall be
agreed between such alternate and the director appointing him. A
director by writing under his hand deposited at the Registered Office
of the Company may at any time revoke the appointment of an alternate
appointed by him. If a director shall die or cease to hold the office
of director, the appointment of his alternate shall thereupon cease and
terminate.
53. The directors may, by resolution, fix the emoluments of directors in
respect of services rendered or to be rendered in any capacity to the
Company. The directors may also be paid such traveling, hotel and other
expenses properly incurred by them in attending and returning from
meetings of the directors, or any committee of the directors or
meetings of the members, or in connection with the business of the
Company as shall be approved by resolution of the directors.
54. Any director who, by request, goes or resides abroad for any purposes
of the Company or who performs services which in the opinion of the
Board go beyond the ordinary duties of a director, may be paid such
extra remuneration (whether by way of salary, commission, participation
in profits or otherwise) as shall be approved by resolution of the
directors.
[SEAL]
<PAGE> 16
55. The Company may pay to a director who at the request of the Company
holds any office (including a directorship) in, or renders services to
any company in which the Company may be interested, such remuneration
(whether by way of salary, commission, participation in profits or
otherwise) in respect of such office or services as shall be approved
by resolution of the directors.
56. The office of directors shall be vacated if the director:
(a) is removed from office by a resolution of members or by a
resolution of directors, or
(b) becomes bankrupt or makes any arrangement or composition with
his creditors generally, or
(c) becomes of unsound mind, or of such infirm health as to be
incapable of managing his affairs, or
(d) resigns his office by notice in writing to the Company.
57. (a) A director may hold any other office or position of profit
under the Company (except that of auditor) in conjunction with
his office of director, and may act in a professional capacity
to the Company on such terms as to remuneration and otherwise
as the directors shall arrange.
(b) A director may be or become a director or other officer of, or
otherwise be interested in any company promoted by the
Company, or in which the Company may be interested, as a
member or otherwise, and no such director shall be accountable
for any remuneration or other benefits received by him as
director or officer or from his interest in such other
company. The directors may also exercise the voting powers
conferred by the shares in any other company held or owned by
the Company in such manner in all respects as they think fit,
including the exercise thereof in favor of any resolutions
appointing them, or any of their number, directors or officers
of such other company, or voting or providing for the payment
of remuneration to the directors or officers of such other
company. A director may vote in favor of the exercise of such
voting rights in manner aforesaid, notwithstanding that he may
be, or be about to become, a director or officer of such other
company, and as such in any other manner is, or may be,
interested in the exercise of such voting rights in manner
aforesaid.
(c) No director shall be disqualified by his office from
contracting with the Company, either as vendor,
[SEAL]
<PAGE> 17
purchaser or otherwise, nor shall any such contract or
arrangement entered into by or on behalf of the Company in
which any director shall be in any way interested be voided,
nor shall any director so contracting or being so interested
by liable to account to the Company for any profit realized by
any such contract or arrangement, by reason of such director
holding that office or of the fiduciary relationship thereby
established. The nature of a director's interest must be
declared by him at the meeting of the directors at which the
question of entering into the contract or arrangement is first
taken into consideration, and if the director was not at the
date of that meeting interested in the proposed contract or
arrangement, or shall become interested in a contract or
arrangement after it is made, he shall forthwith after
becoming so interested advise the Company in writing of the
fact and nature of his interest. A general notice to the
directors by a director that he is a member of a specified
firm or company, and is to be regarded as interested in any
contract or transaction which may, after the date of notice,
be made with such firm or company shall (if such director
shall give the same at a meeting of the directors, or shall
take reasonable steps to secure that the same is brought up
and read at the next meeting of directors after it is given)
be a sufficient declaration of interest in relation to such
contract or transaction with such firm or company. A director
may be counted as one of a quorum upon a motion in respect of
any contract or arrangement which he shall make with the
Company, or in which he is so interested as aforesaid, and may
vote upon such motion.
OFFICERS
58. The directors of the Company may, by a resolution of directors, appoint
officers of the Company at such times as shall be considered necessary
or expedient, and such officers may consist of a President, one or more
Vice-Presidents, a Secretary and a Treasurer and such other officers as
may from time to time be deemed desirable. The officers shall perform
such duties as shall be prescribed at the time of their appointment
subject to any modification in such duties as may be prescribed by the
directors thereafter, but in the absence of any specific allocation of
duties it shall be the responsibility of the President to manage the
day to day affairs of the Company, the Vice-Presidents to act in order
of seniority in the absence of the President by otherwise to perform
such duties as may be delegated to them by the President, the Secretary
to maintain the registers, minute books and records (other than
financial records) of the Company and to ensure compliance with all
procedural requirements imposed on the Company by applicable law, and
the Treasurer to be responsible for the financial affairs of the
Company.
[SEAL]
<PAGE> 18
59. Any person may hold more than one office and no officer need be a
director or member of the Company. The officers shall remain in office
until removed from office by the directors whether or not a successor
is appointed.
60. Any officer who is a body corporate may appoint any person its duly
authorized representative for the purpose of representing it and of
transacting any of the business of the officer.
POWER OF DIRECTORS
61. The business of the company shall be managed by the directors who may
pay all expenses incurred preliminary to and in connection with the
formation and registration of the Company, and may exercise all such
powers of the Company as are not by the Ordinance or by these
Regulations required to be exercised by the members subject to any
delegation of such powers as may be authorized by these Regulations and
to such requirements as may be prescribed by resolution of the members;
but no requirement made by resolution of the members shall prevail if
it be inconsistent with these Regulations nor shall such requirement
invalidate any prior act of the directors which would have been valid
if such requirement had not been made.
62. The Board may entrust to and confer upon any director or officer any of
the powers exercisable by it upon such terms and conditions and with
such restrictions as it thinks fit, and either collaterally with, or to
the exclusion of, its own powers, and may from time to time revoke,
withdraw, alter or vary all or any of such powers. The directors may
delegate any of their powers to committees consisting of such member or
members of their body as they think fit; any committee so formed shall
in the exercise of the powers so delegated conform to any regulations
that may be imposed on it by the directors.
63. The directors may from time to time and at any time by power of
attorney appoint any company, firm or person or body of persons,
whether nominated directly or indirectly by the directors, to be the
attorney or attorneys of the Company for such purposes and with such
powers, authorities and discretions (not exceeding those vested in or
exercisable by the directors under these Regulations) and for such
period and subject to such conditions as they may think fit, and any
such powers of attorney may contain such provisions for the protection
and convenience of persons dealing with any such attorney as the
directors may think fit and may also authorize any such attorney to
delegate all or any of the powers, authorities and discretions vested
in him.
[SEAL]
<PAGE> 19
64. Any directors who is a body corporate may appoint any person its duly
authorized representative for the purpose of representing it at Board
Meetings and of transacting any of the business of the directors.
65. All cheques, promissory notes, drafts, bills of exchange and other
negotiable instruments and all receipts for monies paid to the Company,
shall be signed, drawn, accepted, endorsed or otherwise executed, as
the case may be, in such manner as the directors shall from time to
time by resolution determine.
66. The directors may exercise all the powers of the Company to borrow
money and to mortgage or charge its undertakings, property and uncalled
capital or any part thereof, to issue debentures, debenture stock and
other securities whenever money is borrowed or as security for any
debt, liability or obligation of the Company or of any third party.
67. The continuing directors may act notwithstanding any vacancy in their
body, save that if the number of directors shall have been fixed at two
or more persons and by reason of vacancies having occurred in the Board
there shall be only one continuing director he shall be authorized to
act alone only for the purpose of appointing another director.
PROCEEDINGS OF DIRECTORS
68. The meetings of the Board of Directors and any committee thereof shall
be held at such place or places as the directors shall decide.
69. The directors may elect a chairman of their meetings and determine the
period for which he is to hold office, but if no such chairman is
elected, or if at any meeting the chairman is not present at the time
appointed for holding the same, the directors present may choose one of
their number to be chairman of the meeting.
70. The directors may meet together for the dispatch of business, adjourn
and otherwise regulate their meetings as they think fit. Questions
arising at any meeting shall be decided by a majority of votes; in case
of any equality of votes the chairman shall ;have a second or casting
vote. A director may at any time summon a meeting of the directors. If
the Company shall have only one director the provisions hereinafter
contained for meetings of the directors shall not apply but such sole
director shall have full power to represent and act for the Company in
all matters and in lieu of minutes of a meeting shall record in writing
and sign a note of memorandum of all matters requiring a resolution of
the directors. Such note or memorandum shall constitute sufficient
evidence of such resolution for all purposes.
[SEAL]
<PAGE> 20
71. A director shall be given not less than seven days notice of a meeting
of the directors.
72. Notwithstanding Regulation 71 above, a meeting of directors held in
contravention of that regulation shall be valid if a majority of the
directors entitled to vote at the meeting have waived the notice of the
meeting.
73. The inadvertent failure to give notice of a meeting to a director, or
the fact that a director has not received the notice, does not
invalidate the meeting.
74. A meeting of directors is duly constituted for all purposes f at the
commencement of the meeting there are present in person or by alternate
not less than one-third of the total number of the directors with a
minimum of two.
75. If within half an hour from the time appointed for the meeting a quorum
is not present the meeting shall be dissolved.
76. Any one or more members of the Board of Directors or any committee
thereof may participate in a meeting of such Board or committee by
means of a conference telephone or similar communication equipment
allowing all persons participating in the meeting to hear each other at
the same time. Participation by such means shall constitute presence in
person at a meeting.
77. A resolution approved by a majority of the directors for the time being
entitled to receive notice of a meeting of the directors or of a
committee of the directors and taking the form of one or more documents
in writing or by telex, telegram, cable or other written electronic
communication shall be as valid and effectual as if it had been passed
at a meeting of the directors or of such committee duly convened and
held, without the need for any notice.
INDEMNITY
78. Subject to the provisions of the Ordinance and of any other statute for
the time being in force every director or other officer of the Company
shall be entitled to be indemnified out of the assets of the Company
against all losses or liabilities which he may sustain or incur in or
about the execution of the duties of his office or otherwise in
relation thereto, and no director or other officer shall be liable for
any loss, damage or misfortune which may happen to, or be incurred by
the Company in the execution of the duties of his office, or in
relation thereto.
[SEAL]
<PAGE> 21
79. The directors shall provide for the safe custody of the common seal of
the Company. The common seal when affixed to any instrument, except as
provided in Regulation 2 shall be witnessed by a director or any other
person so authorized from time to time by the directors. The directors
may provide for a facsimile of the common seal and approve the
signature of any director or authorized person which may be reproduced
by printing or other means on any instrument and it shall have the same
force and validity as if the seal had been affixed to such instrument
and the same had been signed as hereinbefore described.
DIVIDENDS AND RESERVES
80. The directors may by resolution declare a dividend but no dividend
shall be declared and paid except out of surplus and unless the
directors determine that immediately after the payment of the
dividend:-
(a) the Company will be able to satisfy its liabilities as they
become due in the ordinary course of its business; and
(b) the realizable value of the assets of the Company will not be
less than the sum of its total liabilities, other than
deferred taxes, as shown in the books of account, and its
capital.
81. Dividends when and if declared may be paid to one class of holder to
the exclusion of the holders of other classes, or in unequal amounts to
holders of the various classes of shares.
82. Dividends may be declared and paid in money, shares, or other property.
83. In computing the surplus for the purpose of resolving to declare and
pay a dividend, the directors may include in their computation the net
unrealized appreciation of the assets of the Company.
84. The directors may from time to time pay to the members such interim
dividends as appear to the directors to be justified by the surplus of
the Company.
85. Subject to the rights of holders of shares entitled to special rights
as to dividends, all dividends shall be declared and paid according to
the par value of the shares in issue, excluding those shares which are
held by the Company as treasury shares at the date of the declaration
of the dividend.
[SEAL]
<PAGE> 22
86. The director may, before recommending any dividend, set aside out of
the profits of the Company such sums as they think proper as a reserve
or reserves which shall, at the discretion of the directors, be
applicable for meeting contingencies, or for any other purpose to which
the profits of the Company may be properly applied, and pending such
application may, at the like discretion, either be employed in the
business of the Company or be invested in such investments as the
directors may time to time think fit.
87. If several persons are registered as joint holders of any share, any of
them may give an effectual receipt for any dividend or other monies
payable on or in respect of the share.
88. In the case of shares issued to bearer, the directors may provide for
the payment of a dividend by reference to counterfoils or warrants
issued with the certificate for such shares, and the production of such
dividend counterfoil or warrant shall evidence entitlement to receipt
of such dividend in the same way and to the same extent as production
of the certificate itself. At the time of presentation of the
counterfoils or warrant, the director may issue such counterfoils or
warrants as may be required to permit receipt by the holder thereof of
subsequent dividends.
89. Notice of any dividend that may have been declared shall be given to
such members in manner hereinafter mentioned and all dividends
unclaimed for three years after having been declared may be forfeited
by the directors for the benefit of the Company.
90. No dividend shall bear interest against the Company.
BOOKS AND RECORDS
91. The Company shall keep such accounts and records as the directors
consider necessary or desirable in order to reflect the financial
position of the Company.
92. The Company shall keep minutes of all meetings of directors, members,
committees of directors, committees of officers and committees of
members, and copies of all resolutions consented to by directors,
members, committees of directors, committees of officers and committees
of members.
93. The books, records and minutes required by Regulations 91 and 92 shall
be kept at the registered office of the Company or at such other place
as the directors determine and shall be open to the inspection of the
directors at all times.
94. The directors shall from time to time determine whether and
[SEAL]
<PAGE> 23
to what extent and at what times and places and under what conditions
or regulations the books, records and minutes of the Company or any of
them shall be open to the inspection of members not being directors and
no member (not being a director) shall have any right of inspecting any
book, record, minutes or document of the Company except as conferred by
law or authorized by resolution of the directors.
AUDIT
95. The directors may by resolution call for the accounts of the Company to
be examined by an auditor or auditors to be appointed by them at such
remuneration as may from time to time be agreed.
96. The auditor may be a member of the Company but no director or officer
shall be eligible during his continuance in office.
97. Every auditor of the Company shall have a right of access at all times
to the books of account and vouchers of the Company, and shall be
entitled to require from the officers of the Company such information
and explanations as he thinks necessary for the performance of his
duties.
98. The report of the auditor shall be annexed to the accounts upon which
he reports, and the auditor shall be entitled to receive notice of, and
to attend, any meeting at which the Company's audited profit and loss
account and balance sheet is to be presented.
99. Any notice, information or written statement required to be given to
members shall be served:
(a) in the case of members holding registered shares, by mail
(airmail service if available) addressed to each member at
the address shown in the share register; and
(b) in the case of members holding shares issued to bearer:-
(i) by mail (airmail service if available) addressed to
the agent or attorney whose name and address has been
given for service of notice by the bearer of the
share (identified for this purpose by the number of
the share certificate); or
(ii) in the absence of an address for service being given,
or if the notice, information or written statement
cannot be served for any other reason, by publishing
the notice, information or written statement in one
or more newspapers published or circulated in the
British Virgin Island and in a
[SEAL]
<PAGE> 24
newspaper in the place where the Company has its
principal office.
100. All notices directed to be given to the members shall, with respect to
any registered share to which persons are jointly entitled, be given to
whichever of such persons is named first in the share register, and
notice so given shall be sufficient notice to all the holders of such
share.
101. Any notice, if served by post, shall be deemed to have been served
within ten days of posting, and in proving such service it shall be
sufficient to prove that the letter containing the notice was properly
addressed and put into the post office.
PENSION AND SUPERANNUATION FUNDS
102. The directors may establish and maintain or procure the establishment
and maintenance of any non-contributory or contributory pension or
superannuation funds for the benefit of, and give or procure the giving
of donations, gratuities, pensions allowances or emoluments to any
persons who are or were at any time in the employment or service of the
Company or any company which is a subsidiary of the Company or is
allied to or associated with the Company or with any such subsidiary,
or who are or were at any time directors or officers of the Company or
of any other company as aforesaid or who hold or held any salaried
employment or office in the Company or such other Company, or any
persons in whose welfare the Company or any such other company as
aforesaid is or has been at any time interested, and to the wives,
widows, families and dependents of any such person, and may make
payments for or toward the insurance of any such persons as aforesaid,
and may do any of the matters aforesaid either alone or in conjunction
with any such other company as such employment or office shall be
entitled to participate in and retain for his own benefit any such
donation, gratuity, pension, allowance or emolument.
WINDING UP
103. If the Company shall be wound up, the Liquidator may, in accordance
with a resolution of members, divide amongst the members in specie or
in kind the whole or any part of the assets of the Company (whether
they shall consist of property of the same kind or not) and may for
such purpose set such value as he deems fair upon any property to be
divided as aforesaid and may determine how such division shall be
carried out as between the members or different classes of members. The
Liquidator may vest the whole or any part of such assets in trustee
upon such trusts for the benefit of the contributories as the
Liquidators shall think fit, but so
[SEAL]
<PAGE> 25
that no member shall be compelled to accept any shares or other
securities whereon there is any liability.
ARBITRATION
104. Whenever any differences arises between the Company on the one hand and
any of the members, their executors, administrators or assigns on the
other hand touching the true intent and construction of the incidence
or consequences of these presents or of the Ordinance touching anything
done or executed omitted or suffered in pursuance of the Ordinance or
touching any breach or alleged breach or otherwise relating to the
premises or to these presents or to any Ordinance affecting the Company
or to any of the affairs of the company such difference shall unless
the parties agree to refer the same to a single arbitrator be referred
to two arbitrators one to be chosen by each of the parties to the
difference and the arbitrators shall before entering on the reference
appoint an umpire.
105. If either party to the reference make default in appointing an
arbitrator either originally or by way of substitution (in the event
that an appointed arbitrator shall die, be incapable of acting or
refuse to act) for ten days after the other party has given him notice
to appoint the same such other party may appoint an arbitrator to act
in the place of the arbitrator of the defaulting party.
AMENDMENT TO ARTICLES
106. The Company may alter or modify the conditions contained in these
Regulations as originally drafted or as amended from time to time by a
resolution of directors.
Dantrust Limited hereby subscribed to these Articles of Association this 13th
day of December, 1996.
- - -----------------------------------------------------------------------
Signed on behalf of Dantrust Limited by:
by: /s/
in the presence of /s/
Witness [SEAL]
<PAGE> 1
I.B.C. NO. 199241
TERRITORY OF THE BRITISH VIRGIN ISLANDS
The International Business Companies Ordinance
(Cap 291)
MEMORANDUM AND ARTICLES
OF ASSOCIATION
of
KALIMANTAN RESOURCES, LTD.
Incorporated the 16th day of September, 1996
DANTRUST LIMITED
P. O. BOX 186
ROAD TOWN, TORTOLA
British Virgin Islands
[SEAL]
<PAGE> 2
TERRITORY OF THE BRITISH VIRGIN ISLANDS
THE INTERNATIONAL BUSINESS COMPANIES ORDINANCE
(Cap 291)
MEMORANDUM OF ASSOCIATION
OF
KALIMANTAN RESOURCES, LTD.
1. The name of the Company is KALIMANTAN RESOURCES, LTD.
2. The registered office of the Company will be situate at the offices of
Dantrust Limited, P. O. Box 186, Road Town, Tortola, British Virgin
Island or at such place in the British Virgin Islands as the directors
may from time to time determine.
3. The registered agent of the Company will be DANTRUST LIMITED, P.O. Box
186, Road Town, Tortola, British Virgin Islands or such other person or
company being a person or company entitled to act as a registered agent
as the directors may from time to time determine.
4. The Objects for which the Company is established are:-
(1) To buy, sell, mortgage, lease, manage, build, develop,
possess and generally deal in real properties; to buy, sell,
underwrite, invest in, exchange or otherwise acquire, and to
hold, manage, develop, deal with and turn to account any
bonds, debentures, shares (whether fully paid or not),
stocks, options, commodities, futures, forward contracts,
notes, or securities of all types, precious metals, gems,
works of art and other articles of value.
(2) To borrow or raise money by the issue of debentures, debenture
stock (perpetual or terminable), bonds, mortgages, or any
other securities founded or based upon all or any of the
assets or property of the Company or without any such security
and upon such terms as to priority or otherwise as the Company
shall think fit.
(3) To guarantee loans and to lend money with or without guarantee
or security to any persons, firms or corporations.
(4) To engage in any other business or businesses whatsoever, or
in any acts or activities, which are not prohibited under any
law for the time being in force in the British Virgin Islands.
(5) To do all such other things as are incidental to or the
Company may think conducive to the attainment of all or any
of the above objects.
[SEAL]
<PAGE> 3
And it is hereby declared that the intention is that each of the objects
specified in each paragraph of this clause shall, except where otherwise
expressed in such paragraph, be an independent main object and be in no wise
limited or restricted by reference to any inference from the terms of any other
paragraph or the name of the Company.
5. The Company has no power to:-
(1) carry on business with persons resident in the British Virgin
Islands;
(2) own an interest in real property situate in the British Virgin
Islands, other than a lease of property for use as an office
from which to communicate with members or where books and
records of the company are prepared or maintained.
(3) carry on banking or trust business, unless it is licensed
under the Banks and Trust Companies Act, 1990;
(4) carry on business as an insurance or re-insurance company,
insurance agent or insurance broker, unless it is licensed
under an enactment authorizing it to carry on that business;
(5) carry on the business of company management unless it is
licensed under the Company Management Act, 1990; or
(6) carry on the business of providing the registered office or
the registered agent for companies incorporated in the British
Virgin Islands.
6. The shares in the Company shall be issued in the currency of the
United States of America.
7. The authorized capital of the Company is US$50,000.00 divided into
50,000 shares with a par value of US$1.00 each.
8. The shares shall be divided into such number of classes and series as
the directors shall by resolution to amend this Memorandum of
Association from time to time determine and until so divided shall
comprise one class and series.
9. The directors shall by resolution have the power to issue any class or
series of shares that the Company is authorized to issue in its
capital, original or increased, with or subject to any designation,
powers, preferences, limitations and restrictions.
10. The directors may issue shares as registered or as shares issued
to bearer as they may determine by resolution of the directors.
[SEAL]
<PAGE> 4
11. Shares issued as registered shares may be exchanged for shares issued
to bearer, and shares issued to bearer may be exchanged for registered
shares.
12. Where shares are issued to bearer, the bearer, identified for this
purpose by the number of the share certificate, shall be requested to
give to the Company the name and address of an agent or attorney for
service of any notice, information or written statement required to be
given to members, and service upon such agent or attorney shall
constitute service upon the bearer of such shares. In the absence of
such name and address being given it shall be sufficient for purpose of
service for the Company to publish the notice, information or written
statement in one or more newspapers published or circulated in the
British Virgin Islands in a newspaper in the place where the Company
has its principal office.
13. The Company shall by resolution of the directors have the power to
amend or modify any of the conditions contained in this Memorandum of
Association.
The undersigned Subscriber, is desirous of being formed into a Company
in pursuance of this Memorandum of Association.
Dantrust Limited hereby subscribe to this Memorandum of Association
this 16th day of September, 1996.
- - -----------------------------------------------------------------------
NAME, ADDRESS AND DESCRIPTION OF SUBSCRIBER
- - -----------------------------------------------------------------------
S. J. Husbands
Authorized signatory
DANTRUST LIMITED
P. O. Box 186
Road Town, Tortola /s/
British Virgin Islands S.J. Husbands
- - -----------------------------------------------------------------------
Dated this 16th day of September, 1996
Witness to the above signature:
/s/
Einstein Samuels
P. O. Box 186
Road Town
Tortola
British Virgin Islands
Legal Secretary
[SEAL]
<PAGE> 5
TERRITORY OF THE BRITISH VIRGIN ISLANDS
THE INTERNATIONAL BUSINESS COMPANIES ORDINANCE
(Cap 291)
ARTICLES OF ASSOCIATION
OF
KALIMANTAN RESOURCES, LTD.
PRELIMINARY
1. References in these Regulations to the Ordinance shall mean the
International Business Companies Ordinance 1984. The following
regulations shall constitute the Regulations of the Company. In these
Regulations words and expressions defined in the Ordinance shall have
the same meaning and, unless otherwise required by the context, the
singular shall include the plural and vice versa, the masculine shall
include the feminine and neuter and references to persons shall include
corporations and all legal entities capable of having a legal
existence.
SHARE CERTIFICATES
2. Every person whose name is entered as a member in the share register
being the holder or registered shares, and every person who subscribes
for shares issued to bearer, shall without payment, be entitled to a
certificate signed by two directors or two officers or by one director
and one officer of the Company or under the common seal of the Company
with or without the signature of any director or officer of the Company
specifying the share or shares held and the par value thereof, provided
that in respect of a registered share, held jointly by several persons
the Company shall not be bound to issue more than one certificate, and
delivery of a certificate for a share to one of several joint holders
shall be sufficient delivery to all.
3. In the case of bearer shares each certificate for shares issued to
bearer shall carry an identifying number, and the Company shall
maintain a register of the name and address of an agent or attorney
which may be given to the Company by the bearer, identified for this
purpose by such identifying statement required to be given to members.
4. If a certificate is worn out or lost it may be renewed on production of
the worn out certificate, or on satisfactory proof of its loss together
with such indemnity as the directors may reasonably require. Any member
receiving a share certificate shall indemnify and hold the Company and
its officers harmless from any loss or liability which it or they may
incur by reason of wrongful or fraudulent use or representation made by
any person by virtue of the possession of such certificate.
[SEAL]
<PAGE> 6
SHARE CAPITAL AND VARIATION OF RIGHTS
5. Subject to the provisions of these Regulations, the unissued and
treasury shares of the Company shall be at the disposal of the
directors who may without limiting or affecting any rights previously
conferred on the holders of any existing shares or class or series of
shares, offer, allot grant options over or otherwise dispose of them to
such persons at such times and upon such terms and conditions as the
Company may, by resolution of directors, determine.
6. Without prejudice to any special rights previously conferred on the
holders of any existing shares or class of shares, any class of shares
that the Company is authorized to issue in its capital may be issued
with such preferred, deferred or other special rights or such
restrictions, whether in regard to dividend, voting, return of capital
or otherwise as the directors by resolution may from time to time
determine.
7. Subject to the provisions of the Ordinance in this regard, shares may
be redeemed without the consent of the member or members concerned on
such terms and in such manner as the directors before or at the time of
the issue of the shares may determine.
8. The directors may redeem any such share at a premium subject to the
Provisions of the Ordinance.
9. If at any time the share capital is divided into different classes of
shares, the rights attached to any class (unless otherwise provided by
the terms of issue of the shares of that class) may, whether or not the
Company is being wound up, be varied with the consent in writing of the
holders of not less than three-fourths of the issued shares of that
class and the holders of not less than three-fourths of the issued
shares of any other class of shares which may be affected by such
variation.
10. The rights conferred upon the holders of the shares of any class issued
with preferred or other rights shall not, unless otherwise expressly
provided by the terms of issue of the shares of that class, be deemed
to be varied by the creation or issue of further shares ranking pari
passu therewith.
11. The Company shall not be bound by or be compelled in any way to
recognize (even when having notice thereof) any equitable contingent,
future or partial interest in any share or any interest in any
fractional part of a share or (except only as by these Regulations or
by law otherwise provided) any other rights thereto by the registered
holder or holders.
[SEAL]
<PAGE> 7
TRANSFER OF SHARES
12. Registered shares in the Company may be transferred by a written
instrument signed by the transferor and containing the name and address
of the transferee or in such other manner or form and subject to such
evidence as the directors shall consider appropriate. Shares issued to
bearer shall be transferred by delivery of the certificate evidencing
same.
13. The holder of registered shares may request that such shares be
exchanged for shares issued to bearer and the directors shall cancel
the certificate evidencing registered shares and the entry in the share
register and instead issue a certificate evidencing shares issued to
bearer with and subject to such evidence of intent as the directors may
consider appropriate.
14. The holder of a certificate evidencing shares issued to bearer may
request that such shares be exchanged for registered shares and the
directors shall cancel the certificate evidencing shares issued to
bearer and instead issue a certificate evidencing registered shares and
enter the name and address of the holder thereof in the share register
with and subject to such evidence of intent as the directors may
consider appropriate.
15. Upon receipt of notification of any change of name and address of any
agent or attorney given to the Company for the purpose of service of
any notice, information or written statement required to be given to
members, identified by reference to the number of the certificate to
bearer, the directors shall forthwith amend the register maintained for
this purpose.
TRANSMISSION OF SHARES
16. The personal representatives, guardian or trustee as the case may be of
a deceased, incompetent or bankrupt sole holder of a registered share
shall be the only persons recognized by the Company as having any title
to the share. In the case of a share registered in the names of two or
more holders, the survivor or survivors, and the personal
representative, guardian or trustee as the case may be of the deceased,
incompetent or bankrupt, shall be the only persons recognized by the
Company as having any title to the share but they shall not be entitled
to exercise any rights as a member of the Company until they have
proceeded as set forth in the following two Regulations.
17. Any person becoming entitled by operation of law or otherwise to a
share or shares in consequence of the death, incompetence or bankruptcy
of any member may be registered as a member upon such evidence being
produced as may reasonably be required by
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<PAGE> 8
the directors. An application by any such person to be registered as a
member for all purposes shall be deemed to be a transfer of shares of
the deceased, incompetent or bankrupt member and the directors shall
treat it as such.
18. Any person who has become entitled to a share or shares in consequence
of the death, incompetence or bankruptcy of any member may, instead of
being registered himself, request in writing that some person to be
named by him be registered as a transferee of such share or shares and
such request shall likewise be treated as if it were a transfer.
ACQUISITION OF OWN SHARES
19. Subject to provisions of the Ordinance in this regard, the directors
may, on behalf of the Company, purchase, redeem or otherwise acquire
any of the Company's own shares for such consideration as they consider
fit, and either cancel or hold such shares as treasury shares. Shares
may be purchased or otherwise acquired in exchange for newly issued
shares in the Company.
20. Subject to the provisions of the Ordinance in this regard, the
directors may, on behalf of the Company, at any time forfeit and cancel
the shares for which payment is not made pursuant to a promissory note
or other written binding obligation for payment of a debt, provided
that written notice specifying a date for payment to be made is served
on the member who defaults in making payment pursuant to the promissory
note or other binding obligation to pay a debt, naming a further date
not earlier than 14 days from the date of service of the notice, on or
before which the payment required by the notice is to be made, and
containing a statement that in the event of non-payment at or before
the time named in the notice, the shares, or any of them, in respect of
which the payment is not made will be liable to forfeiture, and the
requirements of the notice are not complied with.
ALTERATION IN CAPITAL
21. Subject to the terms of any resolution to amend the Memorandum of
Association passed by the members or directors for the purpose of
increasing the authorized capital of the Company, such increased
capital may be divided into shares or classes of share of such
respective amounts, and with such rights or privileges (if any) as the
members or directors think expedient.
22. Any capital raised by the creation of new shares shall be considered as
part of the original capital, and shall be subject to the same
provisions as if it had been part of the original capital.
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<PAGE> 9
23. The members or directors may be resolution to amend the Memorandum
of Association:-
(a) consolidate and divide all or any of its share capital into
shares of larger amounts than its existing shares;
(b) cancel any shares which, at the date of the passing of the
resolution, have not been taken or agreed to be taken by any
person and diminish the amount of its authorized share capital
by the amount of the shares so cancelled;
(c) sub-divide its shares or any of them into shares of smaller
amounts than is fixed by the Memorandum of Association so
that subject to the provisions of Regulation 9 the resolution
whereby any share is sub-divided may determine that as
between the holders of the different classes of shares (if
any) resulting from such sub-division one or more of the
classes of shares may have such preferred or other special
rights over, or may have such qualified or deferred rights or
be subject to any such restrictions as compared with, the
other class or classes as the Company has power to attach to
unissued or new shares;
(d) subject to any determination required by law, reduce its
authorized and issued share capital.
24. Where any difficulty arises in regard to any consolidation and division
under these Regulations the members or directors may settle the same as
they think expedient.
MEETING OF MEMBERS
25. The directors may convene meetings of the members of the Company at
such times and in such manner and places as the directors consider
necessary or desirable, and they shall convene such a meeting upon the
written request of members holding more than 50 percent of the votes of
the outstanding voting shares in the Company.
26. Seven days' notice at the least specifying the place, the day and the
hour of the meeting and the general nature of the business to be
conducted shall be given in manner hereinafter mentioned to such person
whose names on the date the notice is given appear as members in the
share register of the Company and to the agent or attorney of record of
the holders of bearer shares.
27. A meeting of the members shall be deemed to have been validly held,
notwithstanding that it is held in contravention of the requirement to
give notice in Regulation 26, if notice of the meeting is waived by an
absolute majority in number of the
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<PAGE> 10
members or holders of bearer shares having a right to attend and
vote at the meeting.
28. The inadvertent failure of the directors to give notice of a meeting to
a member or to the agent or attorney as the case may be, or the fact
that a member or such agent or attorney has not received the notice,
does not invalidate the meeting.
PROCEEDINGS AT MEETINGS OF MEMBERS
29. No business shall be transacted at any meeting unless a quorum of
members is present at the time when the meeting proceeds to business. A
quorum shall consist of the holder or holders present in person or by
proxy of not less than one-third of the shares of each class or series
of shares entitled to vote as a class or series thereon and the same
proportion of the votes of the remaining shares entitled to vote
thereon.
30. If within an hour from the time appointed for the meeting a quorum is
not present, the meeting shall be dissolved.
31. At every meeting the members present shall choose some one of their
number to be the Chairman. If the members are unable to choose a
Chairman for any reason, then the person representing the greatest
number of voting shares present at the meeting shall preside as
Chairman failing which the oldest individual person shall take the
chair.
32. The Chairman may, with the consent of the meeting, adjourn any meeting
from time to time, and from place to place, but no business shall be
transacted at any adjourned meeting other than the business left
unfinished at the meeting from which the adjournment took place.
33. At any meeting a resolution put to the vote of the meeting shall be
decided on a show of hands by simple majority unless a poll is (before
or on the declaration of the result of the show of hands) demanded:-
(a) by the Chairman; or
(b) by any member or members present or by proxy and representing
not less than one-tenth of the total voting rights of all the
members having the right vote at the meeting.
34. Unless a poll be so demanded, a declaration by the Chairman that a
resolution has, on a show of hands, been carried, and an entry to that
effect in the book containing the minutes of the proceedings of the
Company, shall be sufficient evidence of the fact, without proof of the
number or proportion of the votes recorded in favor of or against such
resolution.
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<PAGE> 11
35. If a poll is duly demanded it shall be taken in such manner as the
Chairman directs, and the result of the poll shall be deemed to be the
resolution of the meeting at which the poll was demanded. The demand
for a poll may be withdrawn.
36. In the case of an equality of votes, whether on a show of hands, or on
a poll the Chairman of the meeting at which the show of hands takes
place, or at which the poll is demanded, shall be entitled to a second
or casting vote.
VOTES OF MEMBERS
37. At any meeting of members whether on a show of hands or on a poll every
holder of a voting share present in person or by proxy shall have one
vote for every voting share of which he is the holder.
38. A resolution which has been notified to all members for the time being
entitled to vote and which has been approved by a majority of the votes
of those members in the form of one or more documents in writing or by
telex, telegram, cable or other written electronic communication shall
forthwith, without the need for any notice, become effectual as a
resolution of the members.
39. If a committee be appointed for any member who is of unsound mind he
may vote by his committee.
40. If two or more persons are jointly entitled to a registered share or
shares:-
(a) each of them may be present in person or by proxy at a meeting
of members and may speak as a member;
(b) if only one of them is present in person or by proxy, he may
vote on behalf of all of them; and
(c) if two or more are present in person or by proxy, they must
vote as one.
41. Votes may be given either personally or by proxy.
42. The instrument appointing a proxy shall be produced at the place
appointed for the meeting before the time for holding the meeting at
which the person named in such instrument proposes to vote.
43. The instrument appointing a proxy shall be in such form as the Chairman
of the meeting shall accept as properly evidencing the wishes of the
member appointing the proxy.
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44. The instrument appointing a proxy shall be in writing under the hand of
the appointer unless the appointer is a corporation or other form of
legal entity other than one or more individuals holding as joint owners
in which case the instrument appointing a proxy shall be in writing
under the hand of an individual duly authorized by such corporation or
legal entity to execute the same. The Chairman of any meeting at which
a vote is cast by proxy so authorized may call for a notarially
certified copy of such authority which shall be produced within 7 days
of being so requested or the vote or votes cast by such proxy shall be
disregarded. In the case of a proxy being given by the holder of a
share issued to bearer, it shall be sufficient for the appointer to
identify himself by writing the identifying number of the certificate
evidencing the shares issued to bearer.
CORPORATIONS ACTING BY REPRESENTATIVES AT MEETINGS
45. Any corporation or other form of corporate legal entity which is a
member of the Company may by resolution of its directors or other
governing body authorize such person as it thinks fit to act as its
representative at any meeting of the members or of any class of members
of the Company, and the person so authorized shall be entitled to
exercise the same powers on behalf of the corporation which he
represents as that corporation could exercise if it were an individual
member of the Company.
DIRECTORS
46. Subject to any subsequent amendment to change the number of directors,
the number of the directors shall be not less than one or more than
seven.
47. The first director or directors shall be elected by the subscriber(s)
to the Memorandum. Thereafter, the directors shall be elected by the
members or directors for such term as the members or directors may
determine and may be removed by the members or the directors.
48. Each director holds office until his successor takes office or until
his earlier death, resignation or removal.
49. A vacancy in the board of directors may be filled by a resolution of
members of a majority of the remaining directors.
50. Until directors are appointed the subscribers to the Memorandum of
Association shall have the power to act as directors.
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51. A director shall not require a share qualification, but nevertheless
shall be entitled to attend and speak at any meeting of the members and
at any separate meeting of the holders of any class of shares in the
Company.
52. A director by writing under his hand deposited at the Registered Office
of the Company may from time to time appoint another director or any
other person to be his alternate. Every such alternate shall be
entitled to be given notice of meetings of the directors and to attend
and vote as a director at any such meeting at which the director
appointing him is not personally present and generally at such meeting
to have and exercise all the powers, rights, duties and authorities of
the director appointing him. Every such alternate shall be deemed to be
an officer of the Company and shall not be deemed to be an agent of the
director appointing him. If undue delay or difficulty would be
occasioned by giving notice to a director of a resolution of which his
approval is sought in accordance with Regulation 77 his alternate (if
any) shall be entitled to signify approval of the same on behalf of
that director. The remuneration of an alternate shall be payable out of
the remuneration payable to the director appointing him, and shall
consist of such portion of the last-mentioned remuneration as shall be
agreed between such alternate and the director appointing him. A
director by writing under his hand deposited at the Registered Office
of the Company may at any time revoke the appointment of an alternate
appointed by him. If a director shall die or cease to hold the office
of director, the appointment of his alternate shall thereupon cease and
terminate.
53. The directors may, by resolution, fix the emoluments of directors in
respect of services rendered or to be rendered in any capacity to the
Company. The directors may also be paid such traveling, hotel and other
expenses properly incurred by them in attending and returning from
meetings of the directors, or any committee of the directors or
meetings of the members, or in connection with the business of the
Company as shall be approved by resolution of the directors.
54. Any director who, by request, goes or resides abroad for any purposes
of the Company or who performs services which in the opinion of the
Board go beyond the ordinary duties of a director, may be paid such
extra remuneration (whether by way of salary, commission, participation
in profits or otherwise) as shall be approved by resolution of the
directors.
55. The Company may pay to a director who at the request of the Company
holds any office (including a directorship) in, or renders services to
any company in which the Company may be interested, such remuneration
(whether by way of salary, commission, participation in profits or
otherwise) in respect
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<PAGE> 14
of such office or services as shall be approved by resolution of the
directors.
56. The office of directors shall be vacated if the director:
(a) is removed from office by a resolution of members or by a
resolution of directors, or
(b) becomes bankrupt or makes any arrangement or composition with
his creditors generally, or
(c) becomes of unsound mind, or of such infirm health as to be
incapable of managing his affairs, or
(d) resigns his office by notice in writing to the Company.
57. (a) A director may hold any other office or position of profit
under the Company (except that of auditor) in conjunction with
his office of director, and may act in a professional capacity
to the Company on such terms as to remuneration and otherwise
as the directors shall arrange.
(b) A director may be or become a director or other officer of, or
otherwise be interested in any company promoted by the
Company, or in which the Company may be interested, as a
member or otherwise, and no such director shall be accountable
for any remuneration or other benefits received by him as
director or officer or from his interest in such other
company. The directors may also exercise the voting powers
conferred by the shares in any other company held or owned by
the Company in such manner in all respects as they think fit,
including the exercise thereof in favor of any resolutions
appointing them, or any of their number, directors or officers
of such other company, or voting or providing for the payment
of remuneration to the directors or officers of such other
company. A director may vote in favor of the exercise of such
voting rights in manner aforesaid, notwithstanding that he may
be, or be about to become, a director or officer of such other
company, and as such in any other manner is, or may be,
interested in the exercise of such voting rights in manner
aforesaid.
(c) No director shall be disqualified by his office from
contracting with the Company, either as vendor, purchaser or
otherwise, nor shall any such contract or arrangement entered
into by or on behalf of the Company in which any director
shall be in any way interested be voided, nor shall any
director so contracting or being so interested by liable to
account to the Company for any profit realized by any such
contract or arrangement, by reason of such director holding
that office or of the fiduciary
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<PAGE> 15
relationship thereby established. The nature of a director's
interest must be declared by him at the meeting of the
directors at which the question of entering into the contract
or arrangement is first taken into consideration, and if the
director was not at the date of that meeting interested in the
proposed contract or arrangement, or shall become interested
in a contract or arrangement after it is made, he shall
forthwith after becoming so interested advise the Company in
writing of the fact and nature of his interest. A general
notice to the directors by a director that he is a member of a
specified firm or company, and is to be regarded as interested
in any contract or transaction which may, after the date of
notice, be made with such firm or company shall (if such
director shall give the same at a meeting of the directors, or
shall take reasonable steps to secure that the same is brought
up and read at the next meeting of directors after it is
given) be a sufficient declaration of interest in relation to
such contract or transaction with such firm or company. A
director may be counted as one of a quorum upon a motion in
respect of any contract or arrangement which he shall make
with the Company, or in which he is so interested as
aforesaid, and may vote upon such motion.
OFFICERS
58. The directors of the Company may, by a resolution of directors, appoint
officers of the Company at such times as shall be considered necessary
or expedient, and such officers may consist of a President, one or more
Vice-Presidents, a Secretary and a Treasurer and such other officers as
may from time to time be deemed desirable. The officers shall perform
such duties as shall be prescribed at the time of their appointment
subject to any modification in such duties as may be prescribed by the
directors thereafter, but in the absence of any specific allocation of
duties it shall be the responsibility of the President to manage the
day to day affairs of the Company, the Vice-Presidents to act in order
of seniority in the absence of the President by otherwise to perform
such duties as may be delegated to them by the President, the Secretary
to maintain the registers, minute books and records (other than
financial records) of the Company and to ensure compliance with all
procedural requirements imposed on the Company by applicable law, and
the Treasurer to be responsible for the financial affairs of the
Company.
59. Any person may hold more than one office and no officer need be a
director or member of the Company. The officers shall remain in office
until removed from office by the directors whether or not a successor
is appointed.
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60. Any officer who is a body corporate may appoint any person its duly
authorized representative for the purpose of representing it and of
transacting any of the business of the officer.
POWER OF DIRECTORS
61. The business of the company shall be managed by the directors who may
pay all expenses incurred preliminary to and in connection with the
formation and registration of the Company, and may exercise all such
powers of the Company as are not by the Ordinance or by these
Regulations required to be exercised by the members subject to any
delegation of such powers as may be authorized by these Regulations and
to such requirements as may be prescribed by resolution of the members;
but no requirement made by resolution of the members shall prevail if
it be inconsistent with these Regulations nor shall such requirement
invalidate any prior act of the directors which would have been valid
if such requirement had not been made.
62. The Board may entrust to and confer upon any director or officer any of
the powers exercisable by it upon such terms and conditions and with
such restrictions as it thinks fit, and either collaterally with, or to
the exclusion of, its own powers, and may from time to time revoke,
withdraw, alter or vary all or any of such powers. The directors may
delegate any of their powers to committees consisting of such member or
members of their body as they think fit; any committee so formed shall
in the exercise of the powers so delegated conform to any regulations
that may be imposed on it by the directors.
63. The directors may from time to time and at any time by power of
attorney appoint any company, firm or person or body of persons,
whether nominated directly or indirectly by the directors, to be the
attorney or attorneys of the Company for such purposes and with such
powers, authorities and discretions (not exceeding those vested in or
exercisable by the directors under these Regulations) and for such
period and subject to such conditions as they may think fit, and any
such powers of attorney may contain such provisions for the protection
and convenience of persons dealing with any such attorney as the
directors may think fit and may also authorize any such attorney to
delegate all or any of the powers, authorities and discretions vested
in him.
64. Any directors who is a body corporate may appoint any person its duly
authorized representative for the purpose of representing it at Board
Meetings and of transacting any of the business of the directors.
65. All cheques, promissory notes, drafts, bills of exchange and other
negotiable instruments and all receipts for monies paid
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<PAGE> 17
to the Company, shall be signed, drawn, accepted, endorsed or otherwise
executed, as the case may be, in such manner as the directors shall
from time to time by resolution determine.
66. The directors may exercise all the powers of the Company to borrow
money and to mortgage or charge its undertakings, property and uncalled
capital or any part thereof, to issue debentures, debenture stock and
other securities whenever money is borrowed or as security for any
debt, liability or obligation of the Company or of any third party.
67. The continuing directors may act notwithstanding any vacancy in their
body, save that if the number of directors shall have been fixed at two
or more persons and by reason of vacancies having occurred in the Board
there shall be only one continuing director he shall be authorized to
act alone only for the purpose of appointing another director.
PROCEEDINGS OF DIRECTORS
68. The meetings of the Board of Directors and any committee thereof shall
be held at such place or places as the directors shall decide.
69. The directors may elect a chairman of their meetings and determine the
period for which he is to hold office, but if no such chairman is
elected, or if at any meeting the chairman is not present at the time
appointed for holding the same, the directors present may choose one of
their number to be chairman of the meeting.
70. The directors may meet together for the dispatch of business, adjourn
and otherwise regulate their meetings as they think fit. Questions
arising at any meeting shall be decided by a majority of votes; in case
of any equality of votes the chairman shall ;have a second or casting
vote. A director may at any time summon a meeting of the directors. If
the Company shall have only one director the provisions hereinafter
contained for meetings of the directors shall not apply but such sole
director shall have full power to represent and act for the Company in
all matters and in lieu of minutes of a meeting shall record in writing
and sign a note of memorandum of all matters requiring a resolution of
the directors. Such note or memorandum shall constitute sufficient
evidence of such resolution for all purposes.
71. A director shall be given not less than seven days notice of a meeting
of the directors.
72. Notwithstanding Regulation 71 above, a meeting of directors held in
contravention of that regulation shall be valid if a majority of the
directors entitled to vote at the meeting have waived the notice of the
meeting.
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73. The inadvertent failure to give notice of a meeting to a director, or
the fact that a director has not received the notice, does not
invalidate the meeting.
74. A meeting of directors is duly constituted for all purposes f at the
commencement of the meeting there are present in person or by alternate
not less than one-third of the total number of the directors with a
minimum of two.
75. If within half an hour from the time appointed for the meeting a quorum
is not present the meeting shall be dissolved.
76. Any one or more members of the Board of Directors or any committee
thereof may participate in a meeting of such Board or committee by
means of a conference telephone or similar communication equipment
allowing all persons participating in the meeting to hear each other at
the same time. Participation by such means shall constitute presence in
person at a meeting.
77. A resolution approved by a majority of the directors for the time being
entitled to receive notice of a meeting of the directors or of a
committee of the directors and taking the form of one or more documents
in writing or by telex, telegram, cable or other written electronic
communication shall be as valid and effectual as if it had been passed
at a meeting of the directors or of such committee duly convened and
held, without the need for any notice.
INDEMNITY
78. Subject to the provisions of the Ordinance and of any other statute for
the time being in force every director or other officer of the Company
shall be entitled to be indemnified out of the assets of the Company
against all losses or liabilities which he may sustain or incur in or
about the execution of the duties of his office or otherwise in
relation thereto, and no director or other officer shall be liable for
any loss, damage or misfortune which may happen to, or be incurred by
the Company in the execution of the duties of his office, or in
relation thereto.
SEAL
79. The directors shall provide for the safe custody of the common
seal of the Company. The common seal when affixed to any
instrument, except as provided in Regulation 2 shall be witnessed
by a director or any other person so authorized from time to time
by the directors. The directors may provide for a facsimile of
the common seal and approve the signature of any director or
authorized person which may be reproduced by printing or other
means on any instrument and it shall have
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<PAGE> 19
the same force and validity as if the seal had been affixed to such
instrument and the same had been signed as hereinbefore described.
DIVIDENDS AND RESERVES
80. The directors may by resolution declare a dividend but no dividend
shall be declared and paid except out of surplus and unless the
directors determine that immediately after the payment of the
dividend:-
(a) the Company will be able to satisfy its liabilities as they
become due in the ordinary course of its business; and
(b) the realizable value of the assets of the Company will not be
less than the sum of its total liabilities, other than
deferred taxes, as shown in the books of account, and its
capital.
81. Dividends when and if declared may be paid to one class of holder to
the exclusion of the holders of other classes, or in unequal amounts to
holders of the various classes of shares.
82. Dividends may be declared and paid in money, shares, or other property.
83. In computing the surplus for the purpose of resolving to declare and
pay a dividend, the directors may include in their computation the net
unrealized appreciation of the assets of the Company.
84. The directors may from time to time pay to the members such interim
dividends as appear to the directors to be justified by the surplus of
the Company.
85. Subject to the rights of holders of shares entitled to special rights
as to dividends, all dividends shall be declared and paid according to
the par value of the shares in issue, excluding those shares which are
held by the Company as treasury shares at the date of the declaration
of the dividend.
86. The director may, before recommending any dividend, set aside out of
the profits of the Company such sums as they think proper as a reserve
or reserves which shall, at the discretion of the directors, be
applicable for meeting contingencies, or for any other purpose to which
the profits of the Company may be properly applied, and pending such
application may, at the like discretion, either be employed in the
business of the Company or be invested in such investments as the
directors may time to time think fit.
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87. If several persons are registered as joint holders of any share, any of
them may give an effectual receipt for any dividend or other monies
payable on or in respect of the share.
88. In the case of shares issued to bearer, the directors may provide for
the payment of a dividend by reference to counterfoils or warrants
issued with the certificate for such shares, and the production of such
dividend counterfoil or warrant shall evidence entitlement to receipt
of such dividend in the same way and to the same extent as production
of the certificate itself. At the time of presentation of the
counterfoils or warrant, the director may issue such counterfoils or
warrants as may be required to permit receipt by the holder thereof of
subsequent dividends.
89. Notice of any dividend that may have been declared shall be given to
such members in manner hereinafter mentioned and all dividends
unclaimed for three years after having been declared may be forfeited
by the directors for the benefit of the Company.
90. No dividend shall bear interest against the Company.
BOOKS AND RECORDS
91. The Company shall keep such accounts and records as the directors
consider necessary or desirable in order to reflect the financial
position of the Company.
92. The Company shall keep minutes of all meetings of directors, members,
committees of directors, committees of officers and committees of
members, and copies of all resolutions consented to by directors,
members, committees of directors, committees of officers and committees
of members.
93. The books, records and minutes required by Regulations 91 and 92 shall
be kept at the registered office of the Company or at such other place
as the directors determine and shall be open to the inspection of the
directors at all times.
94. The directors shall from time to time determine whether and to what
extent and at what times and places and under what conditions or
regulations the books, records and minutes of the Company or any of
them shall be open to the inspection of members not being directors and
no member (not being a director) shall have any right of inspecting any
book, record, minutes or document of the Company except as conferred by
law or authorized by resolution of the directors.
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<PAGE> 21
AUDIT
95. The directors may by resolution call for the accounts of the Company to
be examined by an auditor or auditors to be appointed by them at such
remuneration as may from time to time be agreed.
96. The auditor may be a member of the Company but no director or officer
shall be eligible during his continuance in office.
97. Every auditor of the Company shall have a right of access at all times
to the books of account and vouchers of the Company, and shall be
entitled to require from the officers of the Company such information
and explanations as he thinks necessary for the performance of his
duties.
98. The report of the auditor shall be annexed to the accounts upon which
he reports, and the auditor shall be entitled to receive notice of, and
to attend, any meeting at which the Company's audited profit and loss
account and balance sheet is to be presented.
99. Any notice, information or written statement required to be given to
members shall be served:
(a) in the case of members holding registered shares, by mail
(airmail service if available) addressed to each member at
the address shown in the share register; and
(b) in the case of members holding shares issued to bearer:-
(i) by mail (airmail service if available) addressed to
the agent or attorney whose name and address has been
given for service of notice by the bearer of the
share (identified for this purpose by the number of
the share certificate); or
(ii) in the absence of an address for service being given,
or if the notice, information or written statement
cannot be served for any other reason, by publishing
the notice, information or written statement in one
or more newspapers published or circulated in the
British Virgin Island and in a newspaper in the place
where the Company has its principal office.
100. All notices directed to be given to the members shall, with respect to
any registered share to which persons are jointly entitled, be given to
whichever of such persons is named first in the share register, and
notice so given shall be sufficient notice to all the holders of such
share.
[SEAL]
<PAGE> 22
101. Any notice, if served by post, shall be deemed to have been served
within ten days of posting, and in proving such service it shall be
sufficient to prove that the letter containing the notice was properly
addressed and put into the post office.
PENSION AND SUPERANNUATION FUNDS
102. The directors may establish and maintain or procure the establishment
and maintenance of any non-contributory or contributory pension or
superannuation funds for the benefit of, and give or procure the giving
of donations, gratuities, pensions allowances or emoluments to any
persons who are or were at any time in the employment or service of the
Company or any company which is a subsidiary of the Company or is
allied to or associated with the Company or with any such subsidiary,
or who are or were at any time directors or officers of the Company or
of any other company as aforesaid or who hold or held any salaried
employment or office in the Company or such other Company, or any
persons in whose welfare the Company or any such other company as
aforesaid is or has been at any time interested, and to the wives,
widows, families and dependents of any such person, and may make
payments for or toward the insurance of any such persons as aforesaid,
and may do any of the matters aforesaid either alone or in conjunction
with any such other company as such employment or office shall be
entitled to participate in and retain for his own benefit any such
donation, gratuity, pension, allowance or emolument.
WINDING UP
103. If the Company shall be wound up, the Liquidator may, in accordance
with a resolution of members, divide amongst the members in specie or
in kind the whole or any part of the assets of the Company (whether
they shall consist of property of the same kind or not) and may for
such purpose set such value as he deems fair upon any property to be
divided as aforesaid and may determine how such division shall be
carried out as between the members or different classes of members. The
Liquidator may vest the whole or any part of such assets in trustee
upon such trusts for the benefit of the contributories as the
Liquidators shall think fit, but so that no member shall be compelled
to accept any shares or other securities whereon there is any
liability.
ARBITRATION
104. Whenever any differences arises between the Company on the one hand and
any of the members, their executors, administrators or assigns on the
other hand touching the true intent and construction of the incidence
or consequences of these presents or of the Ordinance touching anything
done or
[SEAL]
<PAGE> 23
executed omitted or suffered in pursuance of the Ordinance or touching
any breach or alleged breach or otherwise relating to the premises or
to these presents or to any Ordinance affecting the Company or to any
of the affairs of the company such difference shall unless the parties
agree to refer the same to a single arbitrator be referred to two
arbitrators one to be chosen by each of the parties to the difference
and the arbitrators shall before entering on the reference appoint an
umpire.
105. If either party to the reference make default in appointing an
arbitrator either originally or by way of substitution (in the event
that an appointed arbitrator shall die, be incapable of acting or
refuse to act) for ten days after the other party has given him notice
to appoint the same such other party may appoint an arbitrator to act
in the place of the arbitrator of the defaulting party.
AMENDMENT TO ARTICLES
106. The Company may alter or modify the conditions contained in these
Regulations as originally drafted or as amended from time to time by a
resolution of directors.
107. The undersigned Subscriber, is desirous of being formed into a Company
in pursuance of this Memorandum of Association.
Dantrust Limited hereby subscribed to these Articles of Association this 16th
day of September, 1996.
- - -----------------------------------------------------------------------
NAME, ADDRESS AND DESCRIPTION OF SUBSCRIBER
- - -----------------------------------------------------------------------
...........................
S. J. Husbands
Authorized signatory
Dantrust Limited
P. O. Box 186
Road Town, Tortola
Virgin Islands /s/
S. J. Husbands
- - -----------------------------------------------------------------------
Dated this 16th day of September, 1996
Witness to the above signature: __________________________
Einstein Samuels
P. O. Box 186
Road Town, Tortola
Virgin Islands
[SEAL]
<PAGE> 24
TERRITORY OF THE BRITISH VIRGIN ISLANDS
THE INTERNATIONAL BUSINESS COMPANIES ACT
(CAPT.291)
CERTIFICATE OF INCORPORATION (SECTION 14 AND 15)
No. 199241
The Registrar of Companies of the British Virgin Islands HEREBY CERTIFIES
pursuant to the International Business Companies, Act, Cap. 291 that all the
requirements of the Act in respect of incorporation having been satisfied,
KALIMANTAN RESOURCES, LTD.
is incorporated in the British Virgin Islands as an International Business
Company this 16th day of September, 1996.
[SEAL] Given under my hand and seal at
Road Town, in the Territory of the
British Virgin Islands
REGISTRAR OF COMPANIES
<PAGE> 1
EXHIBIT 4(iii)
STOCK OPTION AGREEMENT
FOR DIRECTOR
OPTION TO: EDNA POLLOCK DATE: JUNE 1, 1996
FOR: TEN THOUSAND (10,000) SHARES AT: $1.00 PER SHARE
UNTIL: MAY 31, 2006 COST: $10,000
THIS STOCK OPTION AGREEMENT is made the 1st day of June, 1996, by and
between Nevada Manhattan Mining, Incorporated (herein" Nevada"), a Nevada
Corporation with its principal office at 5038 N. Parkway Calabasas, Suite 100,
Calabasas, California 91302 and Edna Pollock, whose address is 207 Moores
Landing Extn., Hampstead, NC 28443 (hereafter "Purchaser/Director").
WITNESSETH
WHEREAS, Nevada is empowered by resolution of its Board of Directors to
provide common stock options to each Nevada Manhattan Mining, Incorporated
Director following each year of service as a Director for the Corporation; and
WHEREAS, Purchaser/Director is desirous of purchasing an option to buy a
quantity of the common shares of Nevada (said shares being restricted and not
tradable until some future date);
NOW THEREFORE, it is mutually agreed by and between the parties hereto as
follows:
1. GRANT OF OPTION. The Company desires to grant Optionee a stock option on the
terms and conditions of this Agreement subject to the terms and conditions set
forth in this Agreement.
2. RIGHT TO PURCHASE. Nevada hereby grants to Purchaser/Director the right and
option to purchase from Nevada up to Ten Thousand shares of the Company's
unissued shares of its par value common stock at the price of $1.00 per share
(may be made in partial payments) for each year of service by
Purchaser/Director. For the purposes of this Agreement, "year of service" shall
mean each year in which Purchaser/Director serves as a director of Nevada.
3. OPTION FEE. The option fee shall be (not applicable) Dollars ($0.00) payable
upon signing of this Agreement. Director's stock options are issued as
compensation for each year of service rendered and shall be exempt from option
fees.
4. EXERCISE PERIOD. This option may be exercised at any time by the
Purchaser/Director on or after the original option date and before the date of
expiration. Option expires ten (10) years from date of original issuance. After
expiration date this agreement is void and unexercisable.
<PAGE> 2
5. NOTICE OF EXERCISE. Optionee shall exercise the option by delivering to the
Company, either in person or by certified or registered mail, written notice of
election to exercise and payment in full of the purchase price, if applicable,
of this Agreement.
The Optionee understands and acknowledges the stock represented by these Options
may not be issued because they exceed the authorized amount of stock. Therefore,
unless some affirmative action by the Board of Directors and/or shareholders to
increase the authorized amount or reverse split the stock or some other action
is taken part or all of these Options may be invalid.
6. RIGHTS AS SHAREHOLDER. Optionee shall have no rights as a shareholder of the
Company with respect to any shares covered by the Option until the date of the
issuance of a share certificate for such shares. No adjustment shall be made for
dividends (ordinary or extraordinary, whether cash, securities, or other
property) or distributions or other rights for which the record date is prior to
the date such share certificate is issued.
7. ISSUANCE OF SHARES. Promptly after the Company's receipt of the written
notice of exercise provided for in Section 5. above and Optionee's payment in
full of the purchase price, the Company shall deliver, or cause to be delivered
to Optionee, certificates for the whole number of shares with respect to which
the Option is being exercised by Optionee. Shares shall be issued in the name of
Optionee or their assignee. Optionee has the right to exercise this Option in
full or in partial installments with the right to exercise the remaining portion
of the option for any unissued shares prior to the expiration date of the
Option. Shares to be issued in minimum blocks of 1,000 shares or if remaining
shares are less than 1,000, to issue the total remaining shares.
If any law or regulation of the Securities and Exchange Commission or of any
federal or state governmental body having jurisdiction shall require the company
or Optionee to take any action prior to issuance to Optionee of the shares of
common stock of the Company specified in the written notice of election to
exercise, or if any listing agreement between the company and any nation
securities exchange requires such shares to be listed prior to issuance, the
date for the delivery of such shares shall be adjourned until the completion of
such action and/or listing.
8. TRANSFERABILITY OF OPTIONS. During the lifetime of the Optionee, Options are
transferable to a third party with written authorization as stated in Section 4
(Exercise of Option). In the event of the death of the Optionee any portion of
the unexercised option may be exercisable by Optionee's personal
representatives, heirs, or legatees by will or the laws of descent and
distribution at any time prior to the expiration of the Option.
9. RECAPITALIZATION OR REORGANIZATION OF COMPANY. Except as otherwise provided
in this Agreement, appropriate and proportionate adjustments shall be made in
the number and class of shares subject to the Option and the exercise price of
the Option in the event of a stock dividend (but only on common stock), stock
split, reverse stock split, recapitalization, reorganization, merger,
consolidation, separation, or like change in the capital structure of the
Company. In the event of a liquidation of the company, or a merger,
reorganization, or consolidation of the Company with any other corporation in
which the Company is not the surviving corporation or the Company becomes a
wholly-owned subsidiary of another corporation, the unexercised portion of the
Option shall be exercisable in the same proportion, whether in shares or value
whichever is greater, as prior to said change in Company structure. To the
extent that the foregoing adjustments relate to stock or securities of the
Company, such adjustments shall be made by the Board of Directors, the
determination of which in that respect shall be final, binding, and conclusive.
10. SEVERABILITY. If any term, provision, covenant, or condition of this
Agreement is held by a court of competent jurisdiction to be invalid, illegal,
or unenforceable for any reason, such invalidity, illegality, or
unenforceability shall not affect any of the other terms, provisions,
convenants, or conditions of this Agreement, each of which shall be binding and
enforceable.
2
<PAGE> 3
11. GOVERNING LAW. This Agreement shall be governed by, and construed in
accordance with the laws of the State of Nevada.
12. ENTIRE AGREEMENT. This Agreement contains the entire understanding between
the parties with respect to the subject matter hereof, and supersedes any and
all prior written or oral agreements between the parties with respect to the
subject matter hereof. There are no representations, agreements, arrangements,
or understandings, either written or oral, between or among the parties with
respect to the subject matter hereof which are not set forth in this Agreement .
IN WITNESS WHEREOF the parties hereto have executed this Agreement the day
and year first mentioned above.
NEVADA MANHATTAN MINING, INCORPORATED
("Nevada")
-----------------------------------
Purchaser / Director
By:
---------------------------------------
Christopher D. Michaels, President/CEO
3
<PAGE> 4
STOCK OPTION AGREEMENT
FOR DIRECTOR
OPTION TO: JOE C. RUDE' III DATE: JUNE 1, 1997
FOR: TEN THOUSAND (10,000) SHARES AT: $1.00 PER SHARE
UNTIL: MAY 31, 2006 COST: $10,000
THIS STOCK OPTION AGREEMENT is made the 1st day of June, 1997, by and
between Nevada Manhattan Mining, Incorporated (herein" Nevada"), a Nevada
Corporation with its principal office at 5038 N. Parkway Calabasas, Suite 100,
Calabasas, California 91302 and Joe C. Rude' III, whose address is 3065 River
North Parkway N.W., Atlanta, GA 30328 (hereafter "Purchaser/Director").
WITNESSETH
WHEREAS, Nevada is empowered by resolution of its Board of Directors to
provide common stock options to each Nevada Manhattan Mining, Incorporated
Director following each year of service as a Director for the Corporation; and
WHEREAS, Purchaser/Director is desirous of purchasing an option to buy a
quantity of the common shares of Nevada (said shares being restricted and not
tradable until some future date);
NOW THEREFORE, it is mutually agreed by and between the parties hereto as
follows:
1. GRANT OF OPTION. The Company desires to grant Optionee a stock option on the
terms and conditions of this Agreement subject to the terms and conditions set
forth in this Agreement.
2. RIGHT TO PURCHASE. Nevada hereby grants to Purchaser/Director the right and
option to purchase from Nevada up to Ten Thousand shares of the Company's
unissued shares of its par value common stock at the price of $1.00 per share
(may be made in partial payments) for each year of service by
Purchaser/Director. For the purposes of this Agreement, "year of service" shall
mean each year in which Purchaser/Director serves as a director of Nevada.
3. OPTION FEE. The option fee shall be (not applicable) Dollars ($0.00) payable
upon signing of this Agreement. Director's stock options are issued as
compensation for each year of service rendered and shall be exempt from option
fees.
4. EXERCISE PERIOD. This option may be exercised at any time by the
Purchaser/Director on or after the original option date and before the date of
expiration. Option expires ten (10) years from date of original issuance. After
expiration date this agreement is void and unexercisable.
<PAGE> 5
5. NOTICE OF EXERCISE. Optionee shall exercise the option by delivering to the
Company, either in person or by certified or registered mail, written notice of
election to exercise and payment in full of the purchase price, if applicable,
of this Agreement.
The Optionee understands and acknowledges the stock represented by these Options
may not be issued because they exceed the authorized amount of stock. Therefore,
unless some affirmative action by the Board of Directors and/or shareholders to
increase the authorized amount or reverse split the stock or some other action
is taken part or all of these Options may be invalid.
6. RIGHTS AS SHAREHOLDER. Optionee shall have no rights as a shareholder of the
Company with respect to any shares covered by the Option until the date of the
issuance of a share certificate for such shares. No adjustment shall be made for
dividends (ordinary or extraordinary, whether cash, securities, or other
property) or distributions or other rights for which the record date is prior to
the date such share certificate is issued.
7. ISSUANCE OF SHARES. Promptly after the Company's receipt of the written
notice of exercise provided for in Section 5. above and Optionee's payment in
full of the purchase price, the Company shall deliver, or cause to be delivered
to Optionee, certificates for the whole number of shares with respect to which
the Option is being exercised by Optionee. Shares shall be issued in the name of
Optionee or their assignee. Optionee has the right to exercise this Option in
full or in partial installments with the right to exercise the remaining portion
of the option for any unissued shares prior to the expiration date of the
Option. Shares to be issued in minimum blocks of 1,000 shares or if remaining
shares are less than 1,000, to issue the total remaining shares.
If any law or regulation of the Securities and Exchange Commission or of any
federal or state governmental body having jurisdiction shall require the company
or Optionee to take any action prior to issuance to Optionee of the shares of
common stock of the Company specified in the written notice of election to
exercise, or if any listing agreement between the company and any nation
securities exchange requires such shares to be listed prior to issuance, the
date for the delivery of such shares shall be adjourned until the completion of
such action and/or listing.
8. TRANSFERABILITY OF OPTIONS. During the lifetime of the Optionee, Options are
transferable to a third party with written authorization as stated in Section 4
(Exercise of Option). In the event of the death of the Optionee any portion of
the unexercised option may be exercisable by Optionee's personal
representatives, heirs, or legatees by will or the laws of descent and
distribution at any time prior to the expiration of the Option.
9. RECAPITALIZATION OR REORGANIZATION OF COMPANY. Except as otherwise provided
in this Agreement, appropriate and proportionate adjustments shall be made in
the number and class of shares subject to the Option and the exercise price of
the Option in the event of a stock dividend (but only on common stock), stock
split, reverse stock split, recapitalization, reorganization, merger,
consolidation, separation, or like change in the capital structure of the
Company. In the event of a liquidation of the company, or a merger,
reorganization, or consolidation of the Company with any other corporation in
which the Company is not the surviving corporation or the Company becomes a
wholly-owned subsidiary of another corporation, the unexercised portion of the
Option shall be exercisable in the same proportion, whether in shares or value
whichever is greater, as prior to said change in Company structure. To the
extent that the foregoing adjustments relate to stock or securities of the
Company, such adjustments shall be made by the Board of Directors, the
determination of which in that respect shall be final, binding, and conclusive.
10. SEVERABILITY. If any term, provision, covenant, or condition of this
Agreement is held by a court of competent jurisdiction to be invalid, illegal,
or unenforceable for any reason, such invalidity, illegality, or
unenforceability shall not affect any of the other terms, provisions,
convenants, or conditions of this Agreement, each of which shall be binding and
enforceable.
2
<PAGE> 6
11. GOVERNING LAW. This Agreement shall be governed by, and construed in
accordance with the laws of the State of Nevada.
12. ENTIRE AGREEMENT. This Agreement contains the entire understanding between
the parties with respect to the subject matter hereof, and supersedes any and
all prior written or oral agreements between the parties with respect to the
subject matter hereof. There are no representations, agreements, arrangements,
or understandings, either written or oral, between or among the parties with
respect to the subject matter hereof which are not set forth in this Agreement .
IN WITNESS WHEREOF the parties hereto have executed this Agreement the day
and year first mentioned above.
NEVADA MANHATTAN MINING, INCORPORATED
("Nevada")
-----------------------------------
Purchaser / Director
By:
---------------------------------------
Christopher D. Michaels, President/CEO
3
<PAGE> 7
STOCK OPTION AGREEMENT
FOR DIRECTOR
OPTION TO: STANLEY J. MOHR DATE: JUNE 1, 1993
FOR: ONE HUNDRED THOUSAND (100,000) SHARES AT: $0.10 PER SHARE
UNTIL: MAY 31, 2003 COST: $10,000
THIS STOCK OPTION AGREEMENT is made the 1st day of June, 1993, by and
between Nevada Manhattan Mining, Incorporated (herein" Nevada"), a Nevada
Corporation with its principal office at 5038 N. Parkway Calabasas, Suite 100,
Calabasas, California 91302 and Stanley J. Mohr, whose address is 4738 Walleta
Way, Las Vegas, Nevada 89119, (hereafter "Purchaser/Director").
WITNESSETH
WHEREAS, Nevada is empowered by resolution of its Board of Directors to
provide common stock options to each Nevada Manhattan Mining, Incorporated
Director following each year of service as a Director for the Corporation; and
WHEREAS, Purchaser/Director is desirous of purchasing an option to buy a
quantity of the common shares of Nevada (said shares being restricted and not
tradable until some future date);
NOW THEREFORE, it is mutually agreed by and between the parties hereto as
follows:
1. GRANT OF OPTION. The Company desires to grant Optionee a stock option on the
terms and conditions of this Agreement subject to the terms and conditions set
forth in this Agreement.
2. RIGHT TO PURCHASE. Nevada hereby grants to Purchaser/Director the right and
option to purchase from Nevada up to One Hundred Thousand shares of the
Company's unissued shares of its par value common stock at the price of $0.10
per share (may be made in partial payments) for each year of service by
Purchaser/Director. For the purposes of this Agreement, "year of service" shall
mean each year in which Purchaser/Director serves as a director of Nevada.
3. OPTION FEE. The option fee shall be (not applicable) Dollars ($0.00) payable
upon signing of this Agreement. Director's stock options are issued as
compensation for each year of service rendered and shall be exempt from option
fees.
4. EXERCISE PERIOD. This option may be exercised at any time by the
Purchaser/Director on or after the original option date and before the date of
expiration. Option expires ten (10) years from date of original issuance. After
expiration date this agreement is void and unexercisable.
<PAGE> 8
5. NOTICE OF EXERCISE. Optionee shall exercise the option by delivering to the
Company, either in person or by certified or registered mail, written notice of
election to exercise and payment in full of the purchase price, if applicable,
of this Agreement.
The Optionee understands and acknowledges the stock represented by these Options
may not be issued because they exceed the authorized amount of stock. Therefore,
unless some affirmative action by the Board of Directors and/or shareholders to
increase the authorized amount or reverse split the stock or some other action
is taken part or all of these Options may be invalid.
6. RIGHTS AS SHAREHOLDER. Optionee shall have no rights as a shareholder of the
Company with respect to any shares covered by the Option until the date of the
issuance of a share certificate for such shares. No adjustment shall be made for
dividends (ordinary or extraordinary, whether cash, securities, or other
property) or distributions or other rights for which the record date is prior to
the date such share certificate is issued.
7. ISSUANCE OF SHARES. Promptly after the Company's receipt of the written
notice of exercise provided for in Section 5. above and Optionee's payment in
full of the purchase price, the Company shall deliver, or cause to be delivered
to Optionee, certificates for the whole number of shares with respect to which
the Option is being exercised by Optionee. Shares shall be issued in the name of
Optionee or their assignee. Optionee has the right to exercise this Option in
full or in partial installments with the right to exercise the remaining portion
of the option for any unissued shares prior to the expiration date of the
Option. Shares to be issued in minimum blocks of 1,000 shares or if remaining
shares are less than 1,000, to issue the total remaining shares.
If any law or regulation of the Securities and Exchange Commission or of any
federal or state governmental body having jurisdiction shall require the company
or Optionee to take any action prior to issuance to Optionee of the shares of
common stock of the Company specified in the written notice of election to
exercise, or if any listing agreement between the company and any nation
securities exchange requires such shares to be listed prior to issuance, the
date for the delivery of such shares shall be adjourned until the completion of
such action and/or listing.
8. TRANSFERABILITY OF OPTIONS. During the lifetime of the Optionee, Options are
transferable to a third party with written authorization as stated in Section 4
(Exercise of Option). In the event of the death of the Optionee any portion of
the unexercised option may be exercisable by Optionee's personal
representatives, heirs, or legatees by will or the laws of descent and
distribution at any time prior to the expiration of the Option.
9. RECAPITALIZATION OR REORGANIZATION OF COMPANY. Except as otherwise provided
in this Agreement, appropriate and proportionate adjustments shall be made in
the number and class of shares subject to the Option and the exercise price of
the Option in the event of a stock dividend (but only on common stock), stock
split, reverse stock split, recapitalization, reorganization, merger,
consolidation, separation, or like change in the capital structure of the
Company. In the event of a liquidation of the company, or a merger,
reorganization, or consolidation of the Company with any other corporation in
which the Company is not the surviving corporation or the Company becomes a
wholly-owned subsidiary of another corporation, the unexercised portion of the
Option shall be exercisable in the same proportion, whether in shares or value
whichever is greater, as prior to said change in Company structure. To the
extent that the foregoing adjustments relate to stock or securities of the
Company, such adjustments shall be made by the Board of Directors, the
determination of which in that respect shall be final, binding, and conclusive.
10. SEVERABILITY. If any term, provision, covenant, or condition of this
Agreement is held by a court of competent jurisdiction to be invalid, illegal,
or unenforceable for any reason, such invalidity, illegality, or
unenforceability shall not affect any of the other terms, provisions,
convenants, or conditions of this Agreement, each of which shall be binding and
enforceable.
2
<PAGE> 9
11. GOVERNING LAW. This Agreement shall be governed by, and construed in
accordance with the laws of the State of Nevada.
12. ENTIRE AGREEMENT. This Agreement contains the entire understanding between
the parties with respect to the subject matter hereof, and supersedes any and
all prior written or oral agreements between the parties with respect to the
subject matter hereof. There are no representations, agreements, arrangements,
or understandings, either written or oral, between or among the parties with
respect to the subject matter hereof which are not set forth in this Agreement .
IN WITNESS WHEREOF the parties hereto have executed this Agreement the day
and year first mentioned above.
NEVADA MANHATTAN MINING, INCORPORATED
("Nevada")
-----------------------------------
Purchaser / Director
By:
---------------------------------------
Christopher D. Michaels, President/CEO
3
<PAGE> 10
ADDENDUM TO STOCK OPTION AGREEMENT
The addendum is made this second day of December, 1996.
WHEREAS Nevada Manhattan Mining, Inc. (the "Company") and Stanley J.
Mohr ("Mohr") entered into a certain stock option agreement dated June 1, 1993;
WHEREAS under the terms of such agreement Mohr was granted a stock
option of 10,000 shares per fiscal year of service at the post-reverse split
rate of $1.00 per share (after giving effect to such post-reverse split);
WHEREAS under the terms of such agreement each option so granted was to
expire ten (10) years from the date of the grant;
WHEREAS pursuant to resolution of the Board of Directors dated May 14,
1996, the Company agreed to extend all such options through the end of the
fiscal year 2006;
NOW THEREFORE, in consideration of the foregoing and other good and
valuable considerations, the receipt and sufficiency of which are hereby
acknowledged, the parties agree as follows:
(1) All previous grants of stock options granted to Mohr which were set
to expire within ten (10) years of the date of the grant are hereby
extended to May 31, 2003;
(2) In all other respects, the terms and conditions of the stock
option agreement shall remain in full force and effect.
IN WITNESS WHEREOF THE PARTIES HAVE CAUSED THIS ADDENDUM TO BE EXECUTED AS OF
THE DATE HEREOF FIRST HEREINABOVE WRITTEN.
NEVADA MANHATTAN MINING, INC. PURCHASER/DIRECTOR:
- - ------------------------------------ -------------------------------------
By: Christopher D. Michaels, C.E.O. Stanley J. Mohr
<PAGE> 11
STOCK OPTION AGREEMENT
FOR DIRECTOR
OPTION TO: JEFFREY S. KRAMER DATE: JUNE 1, 1989
FOR: ONE HUNDRED THOUSAND (100,000) SHARES AT: $0.10 PER SHARE
UNTIL: MAY 31, 1999 COST: $10,000
THIS STOCK OPTION AGREEMENT is made the 1st day of January, 1989, by and
between Nevada Manhattan Mining, Incorporated (herein" Nevada"), a Nevada
Corporation with its principal office at 5038 N. Parkway Calabasas, Suite 100,
Calabasas, California 91302 and Jeffrey S. Kramer, whose address is 6053 Paseo
Canyon, Malibu, CA 90265 (hereafter "Purchaser/Director").
WITNESSETH
WHEREAS, Nevada is empowered by resolution of its Board of Directors to
provide common stock options to each Nevada Manhattan Mining, Incorporated
Director following each year of service as a Director for the Corporation; and
WHEREAS, Purchaser/Director is desirous of purchasing an option to buy a
quantity of the common shares of Nevada (said shares being restricted and not
tradable until some future date);
NOW THEREFORE, it is mutually agreed by and between the parties hereto as
follows:
1. GRANT OF OPTION. The Company desires to grant Optionee a stock option on the
terms and conditions of this Agreement subject to the terms and conditions set
forth in this Agreement.
2. RIGHT TO PURCHASE. Nevada hereby grants to Purchaser/Director the right and
option to purchase from Nevada up to One Hundred thousand shares of the
Company's unissued shares of its par value common stock at the price of $0.10
per share (may be made in partial payments) for each year of service by
Purchaser/Director. For the purposes of this Agreement, "year of service" shall
mean each year in which Purchaser/Director serves as a director of Nevada.
3. OPTION FEE. The option fee shall be (not applicable) Dollars ($0.00) payable
upon signing of this Agreement. Director's stock options are issued as
compensation for each year of service rendered and shall be exempt from option
fees.
4. EXERCISE PERIOD. This option may be exercised at any time by the
Purchaser/Director on or after the original option date and before the date of
expiration. Option expires ten (10) years from date of original issuance. After
expiration date this agreement is void and unexercisable.
<PAGE> 12
5. NOTICE OF EXERCISE. Optionee shall exercise the option by delivering to the
Company, either in person or by certified or registered mail, written notice of
election to exercise and payment in full of the purchase price, if applicable,
of this Agreement.
The Optionee understands and acknowledges the stock represented by these Options
may not be issued because they exceed the authorized amount of stock. Therefore,
unless some affirmative action by the Board of Directors and/or shareholders to
increase the authorized amount or reverse split the stock or some other action
is taken part or all of these Options may be invalid.
6. RIGHTS AS SHAREHOLDER. Optionee shall have no rights as a shareholder of the
Company with respect to any shares covered by the Option until the date of the
issuance of a share certificate for such shares. No adjustment shall be made for
dividends (ordinary or extraordinary, whether cash, securities, or other
property) or distributions or other rights for which the record date is prior to
the date such share certificate is issued.
7. ISSUANCE OF SHARES. Promptly after the Company's receipt of the written
notice of exercise provided for in Section 5. above and Optionee's payment in
full of the purchase price, the Company shall deliver, or cause to be delivered
to Optionee, certificates for the whole number of shares with respect to which
the Option is being exercised by Optionee. Shares shall be issued in the name of
Optionee or their assignee. Optionee has the right to exercise this Option in
full or in partial installments with the right to exercise the remaining portion
of the option for any unissued shares prior to the expiration date of the
Option. Shares to be issued in minimum blocks of 1,000 shares or if remaining
shares are less than 1,000, to issue the total remaining shares.
If any law or regulation of the Securities and Exchange Commission or of any
federal or state governmental body having jurisdiction shall require the company
or Optionee to take any action prior to issuance to Optionee of the shares of
common stock of the Company specified in the written notice of election to
exercise, or if any listing agreement between the company and any nation
securities exchange requires such shares to be listed prior to issuance, the
date for the delivery of such shares shall be adjourned until the completion of
such action and/or listing.
8. TRANSFERABILITY OF OPTIONS. During the lifetime of the Optionee, Options are
transferable to a third party with written authorization as stated in Section 4
(Exercise of Option). In the event of the death of the Optionee any portion of
the unexercised option may be exercisable by Optionee's personal
representatives, heirs, or legatees by will or the laws of descent and
distribution at any time prior to the expiration of the Option.
9. RECAPITALIZATION OR REORGANIZATION OF COMPANY. Except as otherwise provided
in this Agreement, appropriate and proportionate adjustments shall be made in
the number and class of shares subject to the Option and the exercise price of
the Option in the event of a stock dividend (but only on common stock), stock
split, reverse stock split, recapitalization, reorganization, merger,
consolidation, separation, or like change in the capital structure of the
Company. In the event of a liquidation of the company, or a merger,
reorganization, or consolidation of the Company with any other corporation in
which the Company is not the surviving corporation or the Company becomes a
wholly-owned subsidiary of another corporation, the unexercised portion of the
Option shall be exercisable in the same proportion, whether in shares or value
whichever is greater, as prior to said change in Company structure. To the
extent that the foregoing adjustments relate to stock or securities of the
Company, such adjustments shall be made by the Board of Directors, the
determination of which in that respect shall be final, binding, and conclusive.
10. SEVERABILITY. If any term, provision, covenant, or condition of this
Agreement is held by a court of competent jurisdiction to be invalid, illegal,
or unenforceable for any reason, such invalidity, illegality, or
unenforceability shall not affect any of the other terms, provisions,
convenants, or conditions of this Agreement, each of which shall be binding and
enforceable.
2
<PAGE> 13
11. GOVERNING LAW. This Agreement shall be governed by, and construed in
accordance with the laws of the State of Nevada.
12. ENTIRE AGREEMENT. This Agreement contains the entire understanding between
the parties with respect to the subject matter hereof, and supersedes any and
all prior written or oral agreements between the parties with respect to the
subject matter hereof. There are no representations, agreements, arrangements,
or understandings, either written or oral, between or among the parties with
respect to the subject matter hereof which are not set forth in this Agreement .
IN WITNESS WHEREOF the parties hereto have executed this Agreement the day
and year first mentioned above.
NEVADA MANHATTAN MINING, INCORPORATED
("Nevada")
-----------------------------------
Purchaser / Director
By:
---------------------------------------
Christopher D. Michaels, President/CEO
3
<PAGE> 14
ADDENDUM TO STOCK OPTION AGREEMENT
The addendum is made this second day of December, 1996.
WHEREAS Nevada Manhattan Mining, Inc. (the "Company") and Jeffrey S.
Kramer ("Kramer") entered into a certain stock option agreement dated June 1,
1989;
WHEREAS under the terms of such agreement Kramer was granted a stock
option of 10,000 shares per fiscal year of service at the post-reverse split
rate of $1.00 per share (after giving effect to such post-reverse split);
WHEREAS under the terms of such agreement each option so granted was to
expire ten (10) years from the date of the grant; whereas pursuant to
resolution of the Board of Directors dated May 14, 1996, the Company agreed to
extend all such options through the end of the fiscal year 2006;
NOW THEREFORE, in consideration of the foregoing and other good and
valuable considerations, the receipt and sufficiency of which are hereby
acknowledged, the parties agree as follows:
(1) All previous grants of stock options granted to Kramer which
were set to expire within ten (10) years of the date of the grant
are hereby extended to May 31, 2006;
(2) In all other respects, the terms and conditions of the stock
option agreement shall remain in full force and effect.
IN WITNESS WHEREOF THE PARTIES HAVE CAUSED THIS ADDENDUM TO BE EXECUTED AS OF
THE DATE HEREOF FIRST HEREINABOVE WRITTEN.
NEVADA MANHATTAN MINING, INC. PURCHASER/DIRECTOR:
- - ------------------------------------ -------------------------------------
By: Christopher D. Michaels, C.E.O. Jeffrey S. Kramer
<PAGE> 15
STOCK OPTION AGREEMENT
FOR DIRECTOR
OPTION TO: CHRISTOPHER D. MICHAELS DATE: JUNE 1, 1987
FOR: ONE HUNDRED THOUSAND (100,000) SHARES AT: $0.10 PER SHARE
UNTIL: MAY 31, 1997 COST: $10,000
THIS STOCK OPTION AGREEMENT is made the 1st day of June, 1987, by and
between Nevada Manhattan Mining, Incorporated (herein" Nevada"), a Nevada
Corporation with its principal office at 5038 N. Parkway Calabasas, Suite 100,
Calabasas, California 91302 and Christopher D. Michaels, whose address is 876
Ballina Court, Newbury Park, California 91320 (hereafter "Purchaser/Director").
WITNESSETH
WHEREAS, Nevada is empowered by resolution of its Board of Directors to
provide common stock options to each Nevada Manhattan Mining, Incorporated
Director following each year of service as a Director for the Corporation; and
WHEREAS, Purchaser/Director is desirous of purchasing an option to buy a
quantity of the common shares of Nevada (said shares being restricted and not
tradable until some future date);
NOW THEREFORE, it is mutually agreed by and between the parties hereto as
follows:
1. GRANT OF OPTION. The Company desires to grant Optionee a stock option on the
terms and conditions of this Agreement subject to the terms and conditions set
forth in this Agreement.
2. RIGHT TO PURCHASE. Nevada hereby grants to Purchaser/Director the right and
option to purchase from Nevada up to One Hundred Thousand shares of the
Company's unissued shares of its par value common stock at the price of $0.10
per share (may be made in partial payments) for each year of service by
Purchaser/Director. For the purposes of this Agreement, "year of service" shall
mean each year in which Purchaser/Director serves as a director of Nevada.
3. OPTION FEE. The option fee shall be (not applicable) Dollars ($0.00) payable
upon signing of this Agreement. Director's stock options are issued as
compensation for each year of service rendered and shall be exempt from option
fees.
4. EXERCISE PERIOD. This option may be exercised at any time by the
Purchaser/Director on or after the original option date and before the date of
expiration. Option expires ten (10) years from date of original issuance. After
expiration date this agreement is void and unexercisable.
<PAGE> 16
5. NOTICE OF EXERCISE. Optionee shall exercise the option by delivering to the
Company, either in person or by certified or registered mail, written notice of
election to exercise and payment in full of the purchase price, if applicable,
of this Agreement.
The Optionee understands and acknowledges the stock represented by these Options
may not be issued because they exceed the authorized amount of stock. Therefore,
unless some affirmative action by the Board of Directors and/or shareholders to
increase the authorized amount or reverse split the stock or some other action
is taken part or all of these Options may be invalid.
6. RIGHTS AS SHAREHOLDER. Optionee shall have no rights as a shareholder of the
Company with respect to any shares covered by the Option until the date of the
issuance of a share certificate for such shares. No adjustment shall be made for
dividends (ordinary or extraordinary, whether cash, securities, or other
property) or distributions or other rights for which the record date is prior to
the date such share certificate is issued.
7. ISSUANCE OF SHARES. Promptly after the Company's receipt of the written
notice of exercise provided for in Section 5. above and Optionee's payment in
full of the purchase price, the Company shall deliver, or cause to be delivered
to Optionee, certificates for the whole number of shares with respect to which
the Option is being exercised by Optionee. Shares shall be issued in the name of
Optionee or their assignee. Optionee has the right to exercise this Option in
full or in partial installments with the right to exercise the remaining portion
of the option for any unissued shares prior to the expiration date of the
Option. Shares to be issued in minimum blocks of 1,000 shares or if remaining
shares are less than 1,000, to issue the total remaining shares.
If any law or regulation of the Securities and Exchange Commission or of any
federal or state governmental body having jurisdiction shall require the company
or Optionee to take any action prior to issuance to Optionee of the shares of
common stock of the Company specified in the written notice of election to
exercise, or if any listing agreement between the company and any nation
securities exchange requires such shares to be listed prior to issuance, the
date for the delivery of such shares shall be adjourned until the completion of
such action and/or listing.
8. TRANSFERABILITY OF OPTIONS. During the lifetime of the Optionee, Options are
transferable to a third party with written authorization as stated in Section 4
(Exercise of Option). In the event of the death of the Optionee any portion of
the unexercised option may be exercisable by Optionee's personal
representatives, heirs, or legatees by will or the laws of descent and
distribution at any time prior to the expiration of the Option.
9. RECAPITALIZATION OR REORGANIZATION OF COMPANY. Except as otherwise provided
in this Agreement, appropriate and proportionate adjustments shall be made in
the number and class of shares subject to the Option and the exercise price of
the Option in the event of a stock dividend (but only on common stock), stock
split, reverse stock split, recapitalization, reorganization, merger,
consolidation, separation, or like change in the capital structure of the
Company. In the event of a liquidation of the company, or a merger,
reorganization, or consolidation of the Company with any other corporation in
which the Company is not the surviving corporation or the Company becomes a
wholly-owned subsidiary of another corporation, the unexercised portion of the
Option shall be exercisable in the same proportion, whether in shares or value
whichever is greater, as prior to said change in Company structure. To the
extent that the foregoing adjustments relate to stock or securities of the
Company, such adjustments shall be made by the Board of Directors, the
determination of which in that respect shall be final, binding, and conclusive.
10. SEVERABILITY. If any term, provision, covenant, or condition of this
Agreement is held by a court of competent jurisdiction to be invalid, illegal,
or unenforceable for any reason, such invalidity, illegality, or
unenforceability shall not affect any of the other terms, provisions,
convenants, or conditions of this Agreement, each of which shall be binding and
enforceable.
2
<PAGE> 17
11. GOVERNING LAW. This Agreement shall be governed by, and construed in
accordance with the laws of the State of Nevada.
12. ENTIRE AGREEMENT. This Agreement contains the entire understanding between
the parties with respect to the subject matter hereof, and supersedes any and
all prior written or oral agreements between the parties with respect to the
subject matter hereof. There are no representations, agreements, arrangements,
or understandings, either written or oral, between or among the parties with
respect to the subject matter hereof which are not set forth in this Agreement .
IN WITNESS WHEREOF the parties hereto have executed this Agreement the day
and year first mentioned above.
NEVADA MANHATTAN MINING, INCORPORATED
("Nevada")
-----------------------------------
Purchaser / Director
By:
---------------------------------------
Christopher D. Michaels, President/CEO
3
<PAGE> 18
ADDENDUM TO STOCK OPTION AGREEMENT
The addendum is made this second day of December, 1996.
WHEREAS Nevada Manhattan Mining, Inc. (the "Company") and Christopher D.
Michaels ("Michaels") entered into a certain stock option agreement dated
June 1, 1997;
WHEREAS under the terms of such agreement Michaels was granted a stock
option of 10,000 shares per fiscal year of service at the post-reverse split
rate of $1.00 per share (after giving effect to such post-reverse split);
WHEREAS under the terms of such agreement each option so granted was to
expire ten (10) years from the date of the grant; whereas pursuant to the
resolution of the Board of Directors dated May 14, 1996, the Company agreed to
extend all such options through the end of the fiscal year 2006;
NOW THEREFORE, in consideration of the foregoing and other good and
valuable considerations, the receipt and sufficiency of which are hereby
acknowledged, the parties agree as follows:
(1) All previous grants of stock options granted to Michaels which
were set to expire within ten (10) years of the date of the
grant are hereby extended to May 31, 2006;
(2) In all other respects, the terms and conditions of the stock
option agreement shall remain in full force and effect.
IN WITNESS WHEREOF THE PARTIES HAVE CAUSED THIS ADDENDUM TO BE EXECUTED AS OF
THE DATE HEREOF FIRST HEREINABOVE WRITTEN.
NEVADA MANHATTAN MINING, INC. PURCHASER/DIRECTOR:
- - ------------------------------------ -------------------------------------
By: Jeffrey S. Kramer, C.O.O. Christopher D. Michaels
<PAGE> 1
EXHIBIT 10(XIX)
ADDENDUM AGREEMENT
This Addendum Agreement (hereinafter referred to as "AA") is made and entered
into on this 26th day of January, 1997 by and between:
1. MAXWELLS ENERGY & METALS TECHNOLOGY LTD. (hereinafter referred to
as "MAXWELLS"), a corporation organized under the laws of the
Commonwealth of the Bahamas, and having registered offices in the
Bahamas and representative offices in Singapore, and is represented in
this AA by its President Director, William Chan; and
2. NEVADA MANHATTAN MINING INC. (hereinafter referred to as
"NEVADA"), a corporation organized under the laws of the state of
Nevada, and having offices at 5038 North Parkway Calabasas, Suite
100, Calabasas, CA 91302, and is represented in this AA by its
Chairman/CEO, Christopher Michaels.
Whereas Maxwells and Nevada entered into a Principles of Agreement in August
1996 for the development, exploration, and exploitation of a 10,000 hectare gold
concession in Kalimantan, Indonesia.
Per the terms of said Agreement, the Parties agreed that Maxwells may substitute
a like gold concession mutually acceptable by both Parties. Under the terms of
this AA, the Parties hereby agree to substitute the 10,000 hectare concession
(known as the "Abubakar Property") with a new 16,000 hectare concession in East
Kalimantan (known as the "Sopang Property") and all other terms and conditions
remain the same.
The execution of this AA is legal and binding on all Parties, and this AA is
ratified by the Board of Directors of both corporations.
Executed in South Hampton, Bermuda on this 26th day of January, 1997
by:
SIGNATORIES
Nevada Manhattan Mining Inc. Maxwells Energy &
Metals Technology Ltd.
/s/ /s/
Chris Michaels William Chan
Chairman & CEO President Director
<PAGE> 1
EXHIBIT 10(XX)
SINGKAMAS AGUNG LTD.
ACQUISITION AGREEMENT
Whereas this Acquisition Agreement (AA) is made and entered into on this 26th
day of January 1997, by and between:
1. SINGKAMAS AGUNG LTD. (hereinafter referred to as "SINGKAMAS"), a
corporation organized under the laws of the Bahamas and having
representative offices in Singapore. Singkamas is represented in this
transaction by William Chan (Chan); and,
2. KALIMANTAN RESOURCES LTD. (hereinafter referred to as "KALIMANTAN"), a
corporation organized under the laws of the Commonwealth of the British
Virgin Islands, and having registered offices in the Commonwealth of
the British Virgin Islands. Kalimantan is a wholly owned subsidiary of
Nevada Manhattan Mining Inc. which has a representative office at 5038
North Parkway Calabasas, Suite 100, Calabasas, CA 91302. Kalimantan is
represented in the AA by Christopher Michael (CDM) and Jeffrey Kramer
(JK).
Singkamas and Kalimantan are hereinafter referred to the "PARTIES" to this AA.
WITNESSETH
I. CONTRACTUAL TRANSACTIONS
Whereas Singkamas controls potential gold mining concessions as well as
potential coal mining concessions (hereinafter referred to as the "CONCESSIONS")
in West and East Kalimantan, Indonesia:
GUNUNG SILOBAT (SINGKAWANG) CONCESSION
Whereas Singkamas and Kalimantan entered into a "Participation
Agreement" dated 21 December 1996 for the exploration and exploitation
of the Gunung Silobat Concession, also referred to in the Participation
Agreement as the Singkawang Concession, which is located in the
Singkawang Region of West Kalimantan, Indonesia. As delineated in the
Agreement (which is attached herewith as EXHIBIT I), Singkamas
introduced, evaluated, secured, and recommended the Gunung Silobat
Concession as well as other potential concessions within this
Singkawang
<PAGE> 2
gold district to Kalimantan for which consideration will be outlined
and described in this Agreement.
Following Singkamas' efforts to introduce, secure, and recommend the
Gunung Silobat Concession and others to Kalimantan, Kalimantan through
its local Indonesian nominee company which it controls (hereinafter
referred to as "PT DUTA SENA RAHAYU")-acquired the rights to the
government mining authorizations held by PT Kajiwahidah Mandiri
(hereinafter referred to as "KAJIWAHIDAH") for the exploration and
exploitation of the 62-hectare Gunung Silobat Concession and,
potentially, the immediate surrounding areas by expanding the current
exploitation license. At the time of the signing of the "Transfer
Agreement" dated 21 December 1996 between Kajiwahidah and PT Duta,
Kajiwahidah controlled several valid government licenses, one known as
a Kuasa Pertamabangan Expoitasi (KPE) for the exploration and
exploitation of gold metals on the Gunung Silobat Concession, and
another license known as a Kuasa Pertambangan Pengangkutan Dan
Penjualan for the transport and sale of gold from the Concession.
Furthermore, Kajiwahidah represented that it could expand its
exploitation licenses to include 62 hectares. For any new areas of land
beyond those delineated above, Kajiwahidah agreed to use its best
efforts to obtain additional concession, either through blocking land
at the Dept. of Mines and Energy or by seeking cooperations and/or
acquisitions of other KPEs. In any event, Singkamas is prepared to use
its best abilities to assist Kalimantan/Duta in achieving its
objectives for expanding its concession. As described in the Transfer
Agreement, Kajiwahidah agreed to transfer its' 100% interest and/or
it's effective control in the Gunung Silobat Concession to Duta as well
as its' rights to the Government Licenses for the exploration,
exploitation, transport, and sale of gold minerals on the Concession.
As part of the development, exploration/exploitation, and further
investigation/exploration of the Concession, the Parties have already
initiated a site survey in December 1996 and sample testing (via test
pits) of the Concession and surrounding areas. The survey team which
traveled to the Concession consisted of members of Kalimantan's
executive board, professional geologists from Indonesia, and an expert
consultant from Behre Dolbear & Co. which is an internationally renown
mining consulting company. Although the surveys were important, the
results from the laboratories indicate that the Concession does reside
within a gold mineralization zone and that its' potential value is
great (See Geologists/Laboratory Reports in EXHIBIT II). Because of the
outstanding potential for gold reserves in the Singkawang Region and,
especially, for the surrounding land/hills contiguous with the Gunung
<PAGE> 3
Silobat Concession, Singkamas will continue to introduce, evaluate,
secure, and recommend additional concessions to Kalimantan and/or Duta.
The Parties already believe that they have identified potential gold
mining concessions which are contiguous with Gunung Silobat and can
expand their rights to explore and exploit gold metals within this
Singkawang Region from 62 hectares up to approximately 15,000 hectares
and beyond.
THREE (3) COAL CONCESSIONS
Whereas Singkamas has completed the acquisition of three (3) potential
coal mining concessions (hereinafter referred to as the "Concessions")
which reside in a widely recognized coal mineralization zone in East
Kalimantan. These Concessions consist of approximately 280,000 hectares
(or 700,000) acres. Concession I consists of approximately 109,900
hectares; Concession II consists of approximately 104,700 hectares; and
Concession III consists of approximately 71,420 hectares.
Singkamas negotiated the acquisition of these 3 concessions in December
1996 and executed the written agreements on January 7, 1997 through a
series of "Development Agreements" between Singkamas and the PT Andhika
Group of Companies (hereinafter referred to as "ANDHIKA"). The
Development Agreements and all relevant data in respect of concession
information and government filings and licenses/approvals are attached
herewith in EXHIBIT III. Per Andhika's official government filings with
the Dept. of Mines & Energy, the 3 coal concessions are to be
developed, explored and, later, exploited under the Contract of Work
("COW") scheme.
Under the terms of the Development Agreements with Singkamas, it was agreed
between the Parties that Andhika would be responsible for obtaining all
necessary government licenses and, most importantly, the COW, for the
development, exploration, and exploitation of coal from the 3 concessions;
furthermore, Andhika would seek all necessary government licenses related to the
transport and sale of coal produced from the Concessions. Under the terms of the
Development Agreements, Singkamas would receive a 77.5% participation and
interest in each of the 3 coal mining concessions and would provide certain
development funding and other mining and management expertise. The specific
terms of funding as well as consideration which is to be paid to Andhika is
accurately described in the Development Agreements which are attached herewith
in Exhibit III. The Parties agreed that Singkamas would be entitled to appoint a
third party (such as Kalimantan and/or its' local Indonesian nominee company) to
accept a transfer of the COWs and other relevant government licenses in respect
of the 3 coal mining concessions.
<PAGE> 4
The Parties agree that any additional information, points of agreement, and/or
amendments in respect of the Gunung Silobat Concession and the 3 Coal
Concessions will be attached to this Acquisition Agreement as ADDENDUMS.
In the event that Andhika is unable to perform the required obligations and
responsibilities with respect to government licenses and, in particular, the
COWs, Kalimantan/Nevada (with the assistance of Singkamas as necessary) has a
first right to step in with respect to any and all title issues, and to cure or
effect as needed. This may adjust required payments for said properties at the
sole expense of sellers.
Whereas KALIMANTAN is a wholly-owned subsidiary company of Nevada Manhattan
Mining Inc. (hereinafter referred to as "NEVADA") which currently operates gold
mining concessions in the state of Nevada. Kalimantan has the desire, interest,
and ability to acquire and finance the exploration, development and exploitation
of the Gunung Silobat/Singkawang Concession, and the Three (3) Coal Concessions
(hereinafter referred to as the "TRANSACTIONS"). Kalimantan/Nevada has already
begun its' due diligence process to verify the values on the Concessions.
II. CONSIDERATION FOR THE TRANSACTION
Under the terms of this Acquisition Agreement for the gold and coal concessions,
the Parties agree on the following for the development, exploration, and
exploitation of the Concessions:
Whereas Singkamas will merge 51% control and interest in each of the
Concessions in to Kalimantan for the following terms, conditions, and
consideration:
1. Kalimantan's parent company, Nevada, will issue common shares
of Nevada's Common Stock to Singkamas on the following basis:
Four Million (4,000,000) Shares of Nevada's Common
Stock will be issued to Singkamas: Two Hundred
Thousand (200,000) shares of which will be issued
with Piggy-back registration rights upon the signing
of this AA as a signing bonus; and the balance of
Three Million Eight Hundred Thousand (3,800,000)
shares of Common Stock to be issued upon an
independent economic valuation of the Properties
commensurate with industry standards to no less than
USD$40,000,000 or like value. Twenty-five percent
(25%) of the 3.8 million shares referenced above will
have Piggy-back registration rights.
<PAGE> 5
2. Cash payment(s) of approximately USD$6,000,000, commensurate
with Singkamas' obligations per its Development Agreements
with Andhika, which is to be finalized and paid at a date to
be determined by the Parties, will be assumed by
Kalimantan/Nevada, after the results from the gold and coal
concessions are completed by Kalimantan/Nevada in the above
referenced economic valuations. Any additional cash payments
are to be discussed at a later date as necessary.
3. Exploration Program & Board Representation
(a) Kalimantan must commence exploration on the
Concessions within 6 months but not later than 12
months from the execution of this AA.
(b) Singkamas will be entitled to Board representation of
Nevada's Board of Directors.
4. Default Provisions
(a) Kalimantan/Nevada, Christopher Michaels & Jeffrey
Kramer shall be deemed "key men" to this transaction;
and any change in corporate management without the
express written consent of Singkamas shall be deemed
a default and the gold and coal concessions shall
revert back to Singkamas at no cost.
(b) In the event that Kalimantan/Nevada is unable to
complete the development of any of the above
concessions, it is mutually agreed by the Parties
that its interests shall be prorated under some
mutually agreed formula.
5. Singkamas reserves the right to substitute or add other gold
or coal mining concessions or like potential value with the
approval of Kalimantan/Nevada.
6. Voting Trust: Singkamas will vote its shares in favor of
management as long as CDM and JK are executives of
Kalimantan/Nevada.
7. All exploration, operating, and budgetary costs to effectuate
the Company's due diligence and development of the Concessions
will be 100% undertaken by Kalimantan and/or Nevada and will
be fully recoupable prior to any distribution of profits.
<PAGE> 6
8. It is understood that this agreement and all compensation
agreed hereto by both parties above holds true throughout any
and all Kalimantan subsidiaries and spin-off public companies
that may arise through any corporate structure reorganization.
9. Singkamas will use its best efforts and good faith to fully
cooperate with Kalimantan/Nevada to succeed, especially in
Indonesia.
10. Other Consideration(s)
a) Kalimantan/Nevada will have a first right of refusal
to acquire Singkamas' 26.5% interest in these gold
and coal concessions at terms to be mutually agreed
upon by the Parties.
b) Kalimantan/Nevada will have a first right of refusal
to acquire any additional concessions or properties
which Singkamas may make available or control.
The execution of this AA is legal and binding on all Parties, and this Agreement
is ratified by the Board of Directors of both corporations.
Executed in South Hampton, Bermuda on this 26th day of January 1997 by:
SIGNATORIES
Nevada Manhattan Mining, Inc. and
Kalimantan Resources Ltd. Singkamas Agung Ltd.
/s/ /s/
Name: Christopher Michaels Name: William Chan
Title: Chairman/CEO Title: President Director
/s/ /s/
Name: Jeffrey Kramer Name: Graham Mawer
Title: President Title: Asst. Food & Beverage
Manager
<PAGE> 7
EXHIBIT I: PARTICIPATION AGREEMENT BETWEEN
KALIMANTAN AND SINGKAMAS
<PAGE> 8
PARTICIPATION AGREEMENT
This PARTICIPATION AGREEMENT (this "Agreement") is made and entered
into as of the 21st day of December 1996 by and between:
KALIMANTAN RESOURCES, LTD., a corporation duly organized and validly existing
under the laws of the British Virgin Islands (hereinafter referred to as
"Kalimantan"); and
SINGKAMAS AGUNG LTD., a limited liability company duly organized and validly
existing under the laws of the Bahamas (hereinafter referred to as "Singkamas").
Kalimantan and Singakamas are also hereinafter referred to as the "Parties".
WITNESSETH
WHEREAS, Singkamas has evaluated, secured and recommended and introduced PT Duta
Sena Rahayu to the opportunity to acquire all of the mining authorizations
("Kuasa Pertambangan" or "KP") and interest currently held by PT Kajiwahidah
Mandiri in respect of an area of West Kalimantan Indonesia registered as KP DU
480/Kalbar (which mining authorizations are hereinafter referred to as the
"KP's");
WHEREAS, the shareholders of PT Duta Sena Rahayu have entered into a Cooperation
Agreement of even date herewith whereby, for certain agreed consideration, they
have agreed to hold the shares of PT Duta Sena Rahayu for the benefit of
Kalimantan;
WHEREAS, in consideration of the effort devoted by Singkamas to create the
opportunity for the acquisition of the KP's by PT Duta Sena Rahayu, Kalimantan
has agreed to grant Singkamas a participation in the commercial benefits derived
by Kalimantan in respect of the KP's as set forth more fully herein;
NOW, THEREFORE, the Parties hereto do hereby agree as follows:
1. SCOPE OF PARTICIPATION
Kalimantan agrees that it shall grant to Singkamas a participation in
the net profits to be derived from the exploitation of the mining areas
described in the KP's and/or other equity participation, in a
percentage and on detailed terms and conditions to be determined later
in good faith.
<PAGE> 9
2. SINGKAMAS CONSULTATION RIGHTS
Kalimantan hereby undertakes that it shall not make any transfer,
either directly or indirectly, of any legal or beneficial interest it
may have in the KP's and/or in PT Duta Sena Rahayu, or make any
assignment for security purposes or otherwise of such interest, without
the prior written consent of Singkamas which shall not be unreasonably
withheld.
3. LOSS SHARING
In the even that the project described herein results in a loss
requiring additional capital or financial assistance from Kalimantan,
Singkamas agrees to share such loss on a pro rata basis in proportion
to the participation percentage agreed to pursuant to section 1 of this
Agreement.
4. GOVERNING LAW
This Agreement shall be governed by and interpreted in accordance with
the laws of the State of California, United States of America, without
reference to its rules concerning choice of law.
IN WITNESS WHEREOF, the Parties hereto do hereby agree as follows:
KALIMANTAN RESOURCES LTD. SINGKAMAS AGUNG LTD.
By: /s/ by: /s/
Name: Name:
Title: Title:
<PAGE> 10
EXHIBIT II: GEOLOGISTS' REPORT FOR
GUNUNG SILOBAT
<PAGE> 11
PETROLOGY OBSERVATION IN THE VICINITY OF
THE MOUNT SILOBAT OF GOLD PROSPECT
AREA, SINGKAWANG WEST KALMANTAN
----------------------------------------
Based on the previous investigation and core drilling data, as well as the
recent observation in the vicinity of Mount Silobat can be stated that the types
of rock occupying this area generally consist of metasediment of shale and slate
intruded by igneous rock of quartz diorite which is partly younger, and belong
to the upper cretaceous and followed by hydrothermal processes effecting the
host rock of quartz diorite. It * indicated by the presence of supergene and
hypogene alteration distributed throughout this area. Supergene alteration is
locally present at and near the surface and its intensity gradually decreases to
down. It there gives way to hypogene alteration or is separated by a zone of
fresh rock from active hypogene alteration at still greater depth.
CHARACTERISTIC OF SUPERGENE AND HYPOGENE ALTERATIONS
The supergene alteration in this area is characteristic by clayey materials and
silica mixed with the hydrated iron oxides. The hydrated iron oxides possibly
result from alteration of accessory magnetite. No sulphate mineral has been
found among the supergene minerals produced by down-ward-percolating sulphuric
acid solution. It indicated by the absence of sulphide ferro minerals, such as
pyrite.
The product of supergene alteration can be classified as laterite soil which is
distributed and almost cover the whole area, with thickness possibly more than 6
metres. It can be predicted from the one of escarpment near the Pool. A having a
height about of 6 metres. the lower part of the supergene alteration possibly
occupied by supergene enrichment zone which commonly has a breccia texture with
fragments of slightly fresh quartz diorite and metasediment of slate, and it
cementing materials commonly consist of iron
<PAGE> 12
rich bearing clayey materials, fine grained quartz and feldspar. The ore
minerals trapped in this zone are generally secondary copper sulphides, such as;
azurite and malachite with a pervasive goethite and jarosite assemblage. It
indicates the possible former presence of chalcopyrite, possibly as an
interstitial mineral.
The underlying of supergene enrichment is commonly appeared a hypogene
alteration zone consisting of argillic, phyllic, propylitic, and potassic
alterations subsequently. In this area, the indication of potassic alteration
has not been encountered yet. So that, the temperature of hydrothermal solution
commonly does not exceed 240 degrees C (A. Steiner, 1977). A relatively small
increase in temperature above 230 degrees C is thus significant factor
controlling the stability of Na-Ca plagioclase and also the formation of
epidote.
PETROGRAPHY AND MINERAGRAPHY SUMMARY
LATERITIC ZONE
This zone almost occupies the whole prospect area with more than 6 metres thick.
Petrographycally, the type of materials consist of iron rich bearing clayey
materials with yellowish to reddish brown in colour; fine grained quartz,
feldspar, magnetite, ilmenite, limonite and frequently also consist of rock
fragments of strongly weathered quartz diorite, metasediment and secondary
quartz of chalcedony containing reddish brown iron oxides, as well as containing
predominantly fine to coarse grained gold. It can be carly after panning
processes.
SUPERGENE ENRICHMENT ZONE
Indication of the presence possibly the supergene enrichment zone is observed
from the one of sample composed of secondary quartz associated with ore
materials, such as; pyrite, chalcopyrite, fine grained gold as inclusion in
pyrite, illite, and malachite, as well as azurite showing greenish and bluish in
colour. The second
<PAGE> 13
both minerals belong to secondary copper sulphides (Sample. Das.1). The copper
deposit enrichment probably can be expected in this zone, and grade content of
gold possibly slightly decrease.
ARGILLIC ZONE
The argillic zone can be predicted from the sample no. DAS.5. The type of rock
is quart diorite composed of plagioclase which is partly altered and replaced by
clay materials, and also ferromagnesian minerals consisting of hornblends and
biotite are partly altered and replaced by chlorite and isotropic Fe-Ti oxides.
This alteration belong to low alteration and the intensity of alteration can be
classified into partial or medium alteration due to partly altered primary
constituents, The ore minerals present as pyrite. The formation temperature of
above hydrothermal minerals possibly ranged between < 100 degrees C to 150
degrees C (Gregg.j.Corbett at.allergy, 1995),
PHYLLIC ZONE
The phyllic zone is characterized by the sample (DAS,2; DAS.6) of quartz diorite
having a high intensity due to the primary constituents of plagioclase and
ferromagnesian minerals (hornblende and biotite) completely altered and replaced
by hydrothermal minerals, such as; interlayered illite-smectite, illite, well
crystalline fine grained mica (sericite), coarse crystalline white mica, and
chlorite, Fe-Ti oxides. The both later minerals are the product of altered
ferromagnesian minerals. Based on the sequence of above altered minerals,
possibly can be predicted that the hydrothermal solution temperature effecting
this host rock has a large range temperature from 150 degrees C to maximum of
250 degrees C (Gregg.j.Corbett and Terry Leach, 1995).
PROPYLITIC ZONE
The evidence showing the propylitic alteration can be observed from the sample
(DAS.4) composed of secondary quartz as quartz vein, micaceous clay minerals
which are further enriched in
<PAGE> 14
interlayered illite, fine grained calcite, chlorite and epidote. These minerals
possibly derived from altered plagioclose and ferromagnesias minerals. The ore
minerals occur in this sample is mainly pyrite, less chalcopyrite and very fine
grained gold as inclusion in pyrite. The formation temperature of above
hydrothermal minerals, mainly epidote is ranged from 220 degrees c -230 degrees
C and commonly does not exceed 240 degrees C (A. Steiner, 1977). Thus, the
porpilitic zone occurred in between or overlapping with phyllic zone having
maximum temperature of about 250 degrees C, possibly close to the potassic zone
which is not encountered at the surface manifestation.
To ensure the sequence of alteration zone, the author proposes to be
drilled at the location close to the Test.Pit no:2; in between Test.Pit 5 and 7;
no.8; no.6; in between Test.Pit 10 and 11; no 18 and no.15 (7 drill holes) with
average depth of about 200 metres. Thus, total depth is about 1500 metres.
<PAGE> 15
[MAP]
Profile sketch of an inferredevolution of the Quartz Diorite pluton affected by
hydrothermal alteration associated with god deposit in the Silobat prospect
area, Singkawany, West - Kalimantan.
<PAGE> 16
MINERALOGICAL ANALYSIS
EQUIPMENT
- - - Electronic balance with sensitivity of 10-5 gram.
- - - Frantz Isodynamic.
- - - Heavy liquid with specific gravity of more than 3.8.
- - - Small plastic bag.
- - - Brush.
- - - Drying oven.
METHOD OF ANALYSIS
- - - Each concentrate sample should be dried in drying oven, in order to get the
samples free from the water content.
- - - Each sample is weighed and separated into magnetic and non magnetic fractions
using Frantz Isodynamic.
- - - Each fraction is weighed to get the weight procentage either to the
concentrate or the original sample (before panning).
- - - Gold grains will be easily separated.
- - - Each fraction is ready to describe under the binocular microscope, after
separating using the heavy liquid.
MINERALOGICAL ANALYSIS
Each fraction mainly non magnetic minerals describe under the microscope by
means of counting the total grains of identified minerals and multifid with
their specific gravity to get the weight procentage to the concentrate and to
the original sample. Thus, the weight of each fraction be easily counted.
The result of mineralogical are closed.
From the 19 Test.Pit consist of 12 Test.Pit with grade content of gold ranged
30.375 gr/ton to 261.400 gr/ton and 4 Test,Pit have grade range 0.288 gr/ton to
6.0990 gr/ton and 3 Test.Pit are barren or possibly trace.
<PAGE> 17
MINERALOGICAL ANALYSIS OF PAN CONCENTRATE
OF THE TEST PIT SAMPLES FROM THE SILOBAT
PROSPECT AREA, SINGKAWANG, WEST KALIMANTAN
PREPARED BY : KARDANA HARDJADINATA
<TABLE>
<CAPTION>
ems Test pit Depth Weight of weight of Pan Weight identified mineral (gr)
Sample concentrate
No m
(kg)
Weight of Weight of Magnetite Ilmenite Limonite
Magnetic Non
Mineral Magnetic
(gr) mineral
1 2 3 4 5 6 7 8 9
<S> <C> <C> <C> <C> <C> <C> <C> <C>
1. SL. 01 0.0-10 5.0 0.4948 0.6682 0.4848 0.0234 0.0354
1.0-2.0 3.0 0.3970 0.5952 0.3970 0.0208 0.0315
2.0-3.0 1.7 0.3842 0.71169 0.3842 0.0773 0.0702
3.0-3.5 1.6 0.4296 0.5490 0.4296 0.0176 0.0269
2. SL. 02 0.0-10 2.0 0.3862 0.4736 0.3862 0.0587 0.0706
1.0-2.0 1.7 0.3843 0.4482 0.3862 0.0021 0.0157
2.0-3.0 1.3 0.4109 0.7261 0.4109 0.0378 0.2614
3.0-4.0 1.5 0.3367 0.6766 0.3367 0.0622 0.3112
4.0-4.5 1.5 0.4170 1.5626 0.4170 0.1594 0.6766
3. SL. 03 0.0-10 3.0 0.4650 1.5980 0.4650 0.1998 0.5993
1.0-2.0 1.8 0.4447 3.0720 0.4447 0.8942 1.9040
2.0-3.0 1.7 0.4500 1.8891 0.4500 0.1054 1.6155
3.0-4.0 2.0 0.4492 1.3845 0.4492 0.0982 1.1680
4. SL. 04 0.0-10 1.9 2.0889 0.1888 2.0889 0.0138 0.0276
1.0-2.0 1.7 2.1095 0.2279 2.1095 0.0080 0.0239
2.0-3.0 2.2 3.5243 0.1451 3.5243 0.0136 0.0044
3.0-4.0 2.2 7.8145 0.3360 7.8145 0.0276 0.0091
4.0-4.5 1.9 2.0886 1.3845 2.0886 0.0117 0.0011
5. SL. 05 0.0-10 2.1 0.1216 1.5572 0.1216 0.4858 0.2912
1.0-2.0 2.1 0.0776 0.4591 0.0773 0.0437 0.1377
greater than 2.0 2.1 0.0096 0.1508 0.0096 0.0042 0.0016
</TABLE>
<PAGE> 18
<TABLE>
<CAPTION>
Weight of
ems Test pit Depth Sample Quartz Feldspar Pyrite Gold Gold
Contents
No m (kg) (gr/ton)
1 2 3 4 10 11 12 13 14
<S> <C> <C> <C> <S> <C> <C> <C> <C>
1. SL. 01 0.0-10 5.0 0.2359 0.0788 0.0009 0.2939 58.7800
1.0-2.0 3.0 0.2101 0.0702 - 0.2626 87.5333
2.0-3.0 1.7 0.4317 0.0938 - 0.0430 25.2941
3.0-3.5 1.6 0.0447 0.0146 - 0.4452 278.2500
2. SL. 02 0.0-10 2.0 0.1094 0.0393 - 0.1956 97.8000
1.0-2.0 1.7 0.0015 0.0013 - 0.4276 251.5294
2.0-3.0 1.3 0.0319 0.0378 - 0.3572 274.7692
3.0-4.0 1.5 0.0832 0.0625 - 0.1575 105.0000
4.0-4.5 1.5 0.1922 0.1438 - 0.3906 260.4000
3. SL. 03 0.0-10 3.0 0.3996 0.3897 - 0.0096 3.2000
1.0-2.0 1.8 0.1458 0.1277 - 0.0003 0.1667
2.0-3.0 1.7 0.0942 0.0740 - - -
3.0-4.0 2.0 0.0751 0.0432 - - -
4. SL. 04 0.0-10 1.9 0.0415 0.0208 - 0.0851 44.7895
1.0-2.0 1.7 0.0479 0.0203 - 0.1278 75.1765
2.0-3.0 2.2 0.0302 0.0061 - 0.0908 41.2727
3.0-4.0 2.2 0.0551 0.0124 - 0.2318 105.3636
4.0-4.5 1.9 0.0075 0.0018 - 0.1666 87.6842
5. SL. 05 0.0-10 2.1 0.6478 0.1231 - 0.0093 4.4286
1.0-2.0 2.1 0.0597 0.0367 - 0.1813 86.3333
greater than 2.0 2.1 0.0042 0.0016 - 0.1293 69.6500
</TABLE>
<PAGE> 19
<TABLE>
<CAPTION>
1 2 3 4 5 6 7 8 9
<S> <C> <C> <C> <C> <C> <C> <C> <C>
6. SL. 06 00.-10 2.0 0.335 0.3243 0.0335 0.0221 0.0012
1.0-2.0 2.0 0.4501 0.6795 0.4501 0.0325 0.0020
2.0-3.0 2.0 0.4544 0.5972 0.4544 0.0102 0.0045
3.0-4.0 2.0 0.3715 0.3398 0.3715 0.0054 0.0023
greater than 40 2.0 0.4485 0.9440 0.4485 0.0902 0.0043
7. SL. 07 0.0-0.5 2.0 3.3081 0.4749 3.3081 0.0069 0.0194
05.5-1.5 2.0 2.3043 0.1259 2.3043 0.0214 0.0022
1.5-2.5 2.0 2.7146 0.1205 2.7146 0.0105 0.0048
greater than 2.5 2.0 3.3528 0.7626 3.3528 0.0201 0.0009
8. SL. 08 0.25-1.25 2.0 0.0343 0.7280 0.0343 0.1042 0.0114
1.25-2.25 2.0 0.0319 1.6885 0.0319 0.8430 0.0142
2.25-3.25 2.0 0.3964 1.5698 0.3964 0.4321 0.0201
greater than 3.25 2.0 0.4066 1.1799 0.4066 0.5431 0.0290
9. SL. 09 0.0-10 2.0 1.5859 0.2211 1.5859 0.1020 0.0104
1.0-2.0 2.0 2.1004 0.3300 2.1004 0.1542 0.0226
2.0-3.0 2.0 1.5434 0.2154 1.5434 0.0964 0.0482
greater than 3.0 2.0 1.4402 0.2336 1.4402 0.0102 0.0092
10. SL. 10 0.0-10 2.0 0.4643 0.9839 0.4643 0.6230 0.0502
1.0-2.0 2.0 0.0548 1.5171 0.0548 0.9843 0.0320
2.0-3.0 2.0 0.0682 1.6546 0.0682 0.9578 0.2340
greater than 30.0-10 2.0 0.9314 0.6035 0.9314 0.2983 01530
1.0-2.0
11. SL. 11 2.0-3.0 2.0 2.6405 0.2272 2.6405 0.2012 0.0052
greater than 3.0 2.0 2.6553 0.1219 2.6553 0.0942 0.0080
.0 2.0 5.8222 0.4176 5.8222 0.1832 0.0280
2.0 6.9779 0.4710 6.9779 0.1908 0.210
12. SL. 12 0.0-10 2.0 0.1344 1.1514 0.1344 0.1201 0.7832
1.0-2.0 2.0 0.1017 0.1673 0.1017 0.0533 0.0784
2.0-3.0 2.0 0.1182 0.6428 0.1182 0.2104 0.2938
greater than 3.0 2.0 0.0648 0.2095 0.0648 0.1203 0.0209
13. SL. 13 0.0-10 2.0 0.2001 0.1387 0.2001 0.1028 0.0058
1.0-2.0 2.0 0.0723 0.2834 0.0723 0.1215 0.0016
2.0-3.0 2.0 0.0832 0.1590 0.0832 0.1138 0.0311
greater than 3.0 2.0 0.0695 0.0577 0.0695 0.1010 0.0078
</TABLE>
<PAGE> 20
<TABLE>
<CAPTION>
1 2 3 4 10 11 12 13 14
<S> <C> <C> <C> <C> <C> <C> <C> <C>
6. SL. 06 00.-10 2.0 0.0145 0.0023 - 0.2842 142.1000
1.0-2.0 2.0 0.0195 0.0015 - 0.640 312.000
2.0-3.0 2.0 0.0110 0.0010 - 0.5703 285.1500
3.0-4.0 2.0 0.0101 0.0010 - 0.3210 160.5000
greater than 40 2.0 0.0201 0.0049 - 0.8145 407.2500
7. SL. 07 0.0-0.5 2.0 0.4201 0.0385 - - -
05.5-1.5 2.0 0.0148 0.0030 - 0.0845 42.2500
1.5-2.5 2.0 0.0112 0.0022 - 0.0918 45.9000
greater than 2.5 2.0 0.0390 0.0008 - 0.7018 350.9000
8. SL. 08 0.25-1.25 2.0 0.5104 0.1020 - - -
1.25-2.25 2.0 0.4501 0.1870 - - 97.1000
2.25-3.25 2.0 0.8102 0.1172 - 0.0482 85.1000
greater than 3.25 2.0 0.2986 0.1047 - 0.1948 102.2500
9. SL. 09 0.0-10 2.0 0.0985 0.0102 - - -
1.0-2.0 2.0 0.1012 0.0520 - - -
2.0-3.0 2.0 0.0120 0.0106 - - 24.1000
greater than 3.0 2.0 0.146 0.0050 - - 97.4000
10. SL. 10 0.0-10 2.0 0.2904 0.0203 - - -
1.0-2.0 2.0 0.3908 0.1100 - - -
2.0-3.0 2.0 0.3601 0.1027 - - -
greater than 30.0-10 2.0 0.1201 0.0321 - - -
1.0-2.0
11. SL. 11 2.0-3.0 2.0 0.0185 0.0018 0.0004 - -
greater than 3.0 2.0 0.0386 0.0010 0.0001 - -
.0 2.0 0.2012 0.0050 0.0002 - -
2.0 0.2501 0.0090 0.0001 - -
12. SL. 12 0.0-10 2.0 0.2173 0.0308 - - -
1.0-2.0 2.0 0.0301 0.0048 - - -
2.0-3.0 2.0 0.0986 0.0400 - - -
greater than 3.0 2.0 0.0520 0.0140 - 0.0023 1.1500
13. SL. 13 0.0-10 2.0 0.0287 0.0012 0.0002 - -
1.0-2.0 2.0 0.0710 0.0093 - - -
2.0-3.0 2.0 0.0128 0.0012 0.0801 - -
greater than 3.0 2.0 0.0002 - - 0.0487 24.3500
</TABLE>
<PAGE> 21
<TABLE>
<CAPTION>
1 2 3 4 5 6 7 8 9
<S> <C> <C> <C> <C> <C> <C> <C> <C>
14. SL. 14 0.0-10 2.0 0.1202 0.6190 0.1202 0.2830 0.1248
1.0-2.0 2.0 0.0878 0.6274 0.0878 0.1485 0.3218
2.0-3.0 2.0 0.0745 0.9391 0.0745 0.1512 0.6152
3.0-4.0 2.0 0.0759 1.6227 0.0759 0.1920 1.1503
greater than 4.0 2.0 0.0862 0.4985 0.0862 0.1012 0.3201
15. SL. 15 0.0-10 2.0 2.0595 0.5193 2.0595 - 0.0015
1.0-2.0 2.0 2.4674 0.8257 2.4674 0.4321 0.0074
2.0-3.0 2.0 0.5547 0.2668 0.5547 0.1832 0.0129
greater than 3.0 2.0 0.2721 0.1228 0.2721 - -
16. SL. 16 0.0-10 2.0 0.2993 0.0431 0.2993 0.0102 0.0098
1.02-2.0 2.0 1.0106 0.5073 1.0106 0.0328 0.0210
2.0-3.0 2.0 1.5477 0.1004 1.5477 0.0098 0.0085
greater than 3.0 2.0 2.0107 0.0723 2.0107 0.0021 0.0012
17. SL. 17 0.0-10 2.0 2.8179 0.1205 2.8179 0.0183 0.0039
1.0-2.0 2.0 1.5055 0.1028 1.5055 0.0210 0.0019
2.0-3.0 2.0 1.9556 0.0771 1.9556 0.0098 0.0020
3.0-3.5 2.0 2.1690 0.1658 2.1690 0.0231 0.0078
greater than 3.5 2.0 1.6509 0.2003 1.6509 0.0208 0.0094
18. SL. 18 0.0-10 2.0 0.8541 0.1186 0.8541 0.0010 0.0009
1.0-2.0 2.0 1.4178 0.1489 1.4178 0.0001 0.0001
2.0-3.0 2.0 2.945 0.2398 2.8945 0.0001 0.0001
greater than 3.0 2.0 2.5780 0.0941 2.5780 0.0029 0.0042
19. SL. 19 0.0-10 2.0 0.1807 0.1923 0.1807 0.0942 0.0120
1.0-2.0 2.0 0.0704 0.1545 0.0704 0.0120 0.0098
greater than 2.0 2.0 0.1128 0.3408 0.1128 0.0142 0.0164
</TABLE>
<PAGE> 22
<TABLE>
<CAPTION>
1 2 3 4 10 11 12 13 14
<S> <C> <C> <C> <C> <C> <C> <C> <C>
14. SL. 14 0.0-10 2.0 0.1305 0.0806 0.0001 - -
1.0-2.0 2.0 0.1103 0.0468 - - -
2.0-3.0 2.0 0.1521 0.206 - - -
3.0-4.0 2.0 0.2108 0.0696 - - -
greater than 4.0 2.0 0.0612 0.0160 - - -
15. SL. 15 0.0-10 2.0 0.4818 0.0359 0.0001 - -
1.0-2.0 2.0 0.3546 0.0287 0.0015 0.0016 0.8000
2.0-3.0 2.0 0.0521 0.0114 - 0.0072 3.6000
greater than 3.0 2.0 0.1038 0.0088 - 0.0102 5.1000
16. SL. 16 0.0-10 2.0 0.0192 0.0038 0.0001 - -
1.02-2.0 2.0 0.0498 0.0096 - 0.3941 197.0500
2.0-3.0 2.0 0.0165 0.0017 - 0.0639 31.9500
greater than 3.0 2.0 0.0085 0.0007 - 0.0598 29.9000
17. SL. 17 0.0-10 2.0 0.0074 0.0013 0.0002 0.0894 44.7000
1.0-2.0 2.0 0.0147 0.0050 0.0001 0.0601 30.0500
2.0-3.0 2.0 0.0138 0.0013 - 0.0502 25.1000
3.0-3.5 2.0 0.0194 0.0052 - 0.1103 55.1500
greater than 3.5 2.0 0.0236 0.0064 - 0.1401 70.0500
18. SL. 18 0.0-10 2.0 0.0003 - - 0.1164 58.2000
1.0-2.0 2.0 - - - 0.1487 74.3500
2.0-3.0 2.0 - - - 0.2396 119.8000
greater than 3.0 2.0 0.0009 0.0001 - 0.0860 43.0000
19. SL. 19 0.0-10 2.0 0.0294 0.0082 - 0.0485 24.2500
1.0-2.0 2.0 0.0096 0.0016 - 0.1209 60.4500
greater than 2.0 2.0 0.0495 0.0106 - 0.2501 125.0500
</TABLE>
<TABLE>
AVERAGE OF GOLD CONTENT
<S> <C>
SL. O1 :112.464 SL. 10 :BARREN
SL. 02 :247.375 SL. 11 :BARREN
SL. 03 :0.842 SL. 12 :0.288
SL. 04 :70.857 SL. 13 :6.088
SL. 05 :53.471 SL. 14 :BARREN
SL. 06 :261.400 SL. 15 :2.375
SL. 07 :109.763 SL. 16 :64.725
SL. 08 :71.113 SL. 17 :45.010
SL. 09 :30.375 SL. 18 :73.838
SL. 19 :69.917
</TABLE>
<PAGE> 23
[PHOTO]
1). Mikrophotograph of Sample Das. 1, composed of secondary quartz
(1-5/A-E;1-6/C-I) associated with ore minerals, such as pyrite
(1B/10-11/A-B); chalcopyrite (in between illite) and fine grained
gold as inclusion in pyrite (1B) and secondary copper supphides of
malachite (6B) and a zurite (6 C) Cross nicol
<PAGE> 24
[PHOTO]
2). MIkrophotograph of the sample DAS. 5, which is existed possibly
in the urgillic zone characterized by portly altered plagioclase
and replaced by clay materials (10-13/A-I) and also hornblende and
bictite are commonly alterased and replaced by chlorite and Fe-Ti-
oxides (3-4/E-G). The type of rock is altered quartz diorite -
Crossnicol
<PAGE> 25
[PHOTO]
3). Mirophotograph of the sample DAS 2 consisting of altered plagioclase
minerals and replaced by hydrothermal minerals such as : interlayered
illite-smectite-illite and will crystalline fine grained sericite. It
feromagnesias minerals are also altered and completely replaced by
chlorite and Fe-Ti oxides (3-4/D-#). This rock possibly occurred in the
low rank of phyllic alteration. Cross nicol.
<PAGE> 26
[PHOTO]
4). Mikrophotograph of the sample DAS. 6 of altered quartz diorite
with a high rank alteration (advanced phyllic alteration).
Characterized by will developed of white mica (muscovite) (1-3/F-
I) illite and chlorite as the result alteration from ferro
magnesian minerals (hornblende and biotite) (11-13/C-G). Cross
nicol.
<PAGE> 27
[PHOTO]
5). Mikrophotograph of the sample DAS. 4 Consisting of hydrothermal
quartz; fine grained calcite, chlorite and epidoe, as well as ore
minerals, such as : pyrite, chelcopyrite and very fine grained
gold. This rock possibly occurred in prophylitic zone. Cross
nicol
<PAGE> 28
[PHOTO]
6). Mikrophotograph of slate composed of fine grained illite, quartz
and feldspar shoring a gold lamination. No. alteration at all.
Cross nicol
<PAGE> 29
[PHOTO]
7). Mikrophotograph of a fresh quartz diorite composed of plagioclase (An38
- An52); quartz, hornblende, biotite less K-feldspar and magnetite or
ilminite - Cross nicol.
<PAGE> 30
EXHIBIT II
GEOLOGICAL REPORT OF THE PROPERTY
<PAGE> 31
G. SILUBAT GOLD PROSPECT
KALIMANTAN BARAT, INDONESIA
L. WHITEHOUSE
May ]977.
<PAGE> 32
2. INTRODUCTION
2.1. Previous Work
The Gunung Silubat area forms part of what was known as the Chinese district of
Western Borneo (Kalimantan Barat), encompassing the sub-districts of Sambas,
Bengkajang, Pamangkat, Singkawang and mempawah. Consequently it has been
subjected to much exploitation by the Chinese since the 1800's. Understandly no
records of production have been kept due to tax evasion.
From 1935 until the beginning of World War II in 1940, a Dutch company, N.V.
Silobat Mijnbouw MIJ. worked the alluvials adjacent to G. Silubat utilising hand
labour, hoes and wooden troughs. During this period the amount of gold dug was
63.3 Kg. The three areas worked are now lagoons 1 - 3; 28 acres, 11-1/2 acres
and 19 acres in area respectively. In 1968, P.T. Silubat obtained the concession
over G. Silubat and began preparations to empty the lagoons as well as hand
auger drill many of the adjacent alluvial areas to confirm gold values
previously recorded by the geologist working for the previous Dutch company, E.
Peters, utilising bangka drills. However, because of the communist insurgency
problems in nearby Barawak, in 1969, the Laksus PagKopKamtib closed the area to
everyone and during the uprising, all machinery, houses etc. along with all
reports and plans were destroyed.
<PAGE> 33
In 1971 the area was reopened but because of smashed machinery, lack of funds
etc. P.T. Silubat could not continue their previous work. In 1975, Exploration
Mining Concession D.U. 305 was awarded to Wahidah Trading and Mining Co. the
present K.P. holders.
2.2. Location and Access
G. Silubat (109 metres elevation a.s.l.) is located at Longitude 1 degree 1' N
and Latitude 109 degrees 12' E in the sub-district of Sambas, Kalimantan Barat.
Though only 25 miles due east of the coast, it is separated by densely timbered
swampy lowlands. From Pontianak (daily flights from Jakarta), the prospect can
be reached in one day and involves a 3 hour road journey (bitumenised high speed
road in very good condition) via Mempawah, Singkawang and Pemangkat to Semparuk,
thence a 6 hour (more or less depending on type of outboard motor and prow used)
journey firstly up to the Sungai Sebangkaw (good for vessels to 50 tons) then
approximately 10 kms. up to the narrow vegetation clogged S. Bakun (good for
prows less than 1 ton, and subject to periods of low river levels). The G.
Silubat area consists of a series of ridges and spurs stemming from G. Silubat
over an area 2 km. by 1 km., covered with rubber trees and light rainforest and
surrounded by swampy lowlands. Although there is a small kampong in the area,
whose source of income is harvesting rubber, it cannot be relied upon for labour
(too lazy) or food supplies.
It seems feasible to be able to construct a bulldozer tract to G. Silubat from
Buduk, 5 kms. away following low rises above the swampy plains and from there,
upgrading a disused road from Sebakoawan (10 kms. away).
<PAGE> 34
The only other feasible way to bring in heavy machinery would be to dredge the
S, Bakun (10 kms. length). Note - in 1968 a 1-1/2 ton jeep was brought to G.
Silubat by clearing the vegetation from the banks of this creek. it is
anticipated that it would take 100 labourers one month to be able to reclear
this creek to be able to repeat such a feat.
2.3. Present Survey
The writer along with Moksin Lele, the project officer for Wahidah Trading and
Mining Co. and three labourers arrived at the site on Sunday 24th April and
spent the next 6 days doing ridge and spur traverses, geologic mapping at a
scale of 1:5,000 and digging numerous pits to bedrock. A total of 21 rock chip
and 7 stream sediment samples were collected and submitted for assay.
Difficulties were encountered with a corrupt army official at G. Silubat and due
to the labour having to return before the Election Day, the survey was hurriedly
finished on Sunday 1st May. The writer arrived back in Jakarta on Monday 2nd
May.
2.4. Land Tenure
D.U. 305/KALBAR is held by Decree of the Directorate General of General Mining
No. 1696/Sk-DJ/DDP 342/pertamb/1975 and was granted to Fa. Wahidah Trading and
Mining Co. on 13/10/75, valid for 3 years and application made for Gold, Silver
and its associated metals.
<PAGE> 35
3. GEOLOGY
3.1. Rock Types
3.1.1. Siltsonte
Where unaltered, this unit is seen as a green-black mudestone/fine
siltstone. In one place it resembles a fine-grained basaltic futt.
These rocks form the cep rocks to the acid intrusives and it is highly
probable that they carry the bulk of the mineralisation in the G.
Silubat area.
3.1.2. Quartz-feldspar porphyryr
Small prismatic quartz crystals observed in the altered porphyritic
saprolite characterise this rock type. These crystals are indicative of
a high temperature - subvolcanic origin. Intrusive braccias noted on
the margins of this body are also indicative. On the western margin of
the prospect, where this unit is most apparent, a fern vegetation
anomaly as well as white sand film on top of the soil occurs over an
area 400 metres long by 150 metres wide.
3.1.3. Quartz diorite
Where relatively unaltered, this rock is seen as a medium grained byer
fresh quartz-hornblende diorite with disseminated magnetite and rare
disseminated pyrite and traces of chalcopyrite. This unit outcrops over
an area 1000 metres by 800 metres as is for the most part latered and
mineralised.
<PAGE> 36
3.2. Alteration
An alteration system is developed at G. Silubat over an area in excess of 2000
metres by 1500 metres. Unaltered rocks are uncommon in the area and alteration
zoning is recognised.
Propylitic alteration is recognised as chloritisation of hornblend mefics and
epidote disseminations in feldspar sites in dioritic rocks. This alteration is
accompanied by weak disseminated and fractured controlled pyrite mineralisation.
Aroillic alteration affects dominantly the siltsone cap rocks. Alteration
minerals are characteristically clay and weak sericite (as alteration envelops
around sulphide veins). Rocks bordering the more intense phyllic alteration
zones show similarities to the Cabank Kiri (Sulawess Utara) porphyry copper
deposit in that alteration minerals are clay, green sericite and specularite.
This type of alteration, known as advanced aroillic alteration is difficult to
distinguish in the field from or aroillic alteration as the most diagnostic
minerals, including andalusits and diaspor are recognisable only in this
section.
Phyllic alteration is characterised by intense pervasive [ILLEGIBLE COPY] which
completely modifies the original texture of the rock. A lessor quartz-sericite
assemblage is also noted. In the locality, a shaft sunk on highly altered
(phyllic) oxidised diorite bottomed at the water table in secondary
biotite bearing rock. It is quite possible that this type of alteration
(potassic) could be more widely spread but because of the surface oxidation and
modification of the rocks in the phyllic zones, has not been recognised.
<PAGE> 37
3.3. Mineralisation
The G. Silubat area is characterised by strong leaching with the result that it
is only in the zones of weak alteration that unoxidised sulphide mineralisation
is noted. Original sulphides are recognised as hematitic disseminations
(oxidation of chalcocite?), and goethitic veins commonly with sulphide boxworks,
and disseminations after probable pyrite. Limonitic (50% goethite 50% hematite)
fracture cotains are also indicative of former sulphides.
Original total sulphide (OTS) content ranges from 5 - 7 volume percent,
mostly as veins and fracture coatings, in altered siltstone cap rocks
immediately adjacent to dioritic bodies, to 2 - 3 volume percent as coarse
disseminations, dominantly goethitic and hematitic peppering, in altered diorite
and quartz-feldspar porphyry.
Race chalcocite is noted in rocks at the water table. However, pan concentrates
of alluvials shedding off G. Silubat contain fine nonmagnetic black minerals
which are thought to be chalcocite. pending assays will resolve this. Thin platy
pyrite and gold, obviously derived from this veins are also found in pan
concentrates. A previous assay result of a mixture of pyrite and gold gave an
assay result of 25% copper, showing that much of this pyrite was in fact
chalcopyrite. The write did not see this sample of "pyrite".
<PAGE> 38
4. GEOCHEMISTRY
21 rock chip and 7 stream sediment samples were submitted for analyses to
Superintendent Laboratories in Jakarta. Copper-in-rock values range from 11 ppm
to 140 ppm with an average value of 40 ppm. Lead-in-rock values range from 15
ppm to 385 ppm with an average value of 65 ppm. Zinc-in-rock values range from
15 ppm to 106 ppm with an average value of 47 ppm. Molybdenum-in-rock values
range from less than 1 ppm to a spot high of 20 ppm. Average values are less
than 1 ppm. Gold was undetectable in all rock samples submitted (a lower
detection limit of 0.5 ppm for the method of analyses used). Stream sediment
samples gave similar copper, lead and zinc and molybdenum. Gold values of 0.5 to
1.05 ppm were obtained in four of the seven samples submitted.
The values obtained are puzzling because of several reasons. Firstly the
concentrate of "pyrite" that when assayed gave a figure of 25% copper shows
there to be copper in the system. Secondly, abundant free gold was visible in
all the stream sediment samples submitted. The gold-in-silt values
obtained seem inconsistent with this fact. Thirdly the gold is shedding off the
G. Silubat hills and the fact that no gold is detected in any of the 21 samples,
which were representative of various rock, mineralisation and alteration types
also seems inconsistent. Fourthly the copper values obtained are too low for the
porphyry copper type style of mineralisation and alteration observed.
<PAGE> 39
It is therefore proposed to have the samples reassayed by Geomin in
Australia, utilising the RG.50 method for gold analyses.
4.1. GOLD - IN - ROCK CHECK ASSAYS
Twenty one pulverised rock pulps were submitted to ANALABS in Australia
for gold analyses utilising a fire assay method. Values range from 0.05
ppm to 0.81 ppm with an average value of 0.20 ppm. Eight of these
samples which lie wholely within the dioritic intrusive give an average
gold - in rock value of 0.33 ppm. Host sediments/volcanics average a
value of 0.12 ppm. It was noted that agreement on duplicate samples
from these lower values was not good, and that they represent an
average only.
<PAGE> 40
5. BULK COPPER - GOLD POTENTIAL
Gold - in - rock values for dioritic rocks outcropping over an area
some 1300 metres long, and 500 metres wide, elongated NW-SE, give an
average of 0.33 ppm. These rocks interpreted as forming a leached
capping over chalcopyrite mineralisation. Utilising a 4:1 copper - gold
ratio (1 ppm (Au) in a leached cap represents a hypogene grade of 4%
copper - this figure has been arrived at from research into porphyry
copper deposit is at Ok Tedi (New Guinea), Bouganville, the Philippines
and more recently, the Cabang Kiri deposit in Sulawesi, Indonesia),
this gives an expected hypogene grade of 1.3% which is highly
significant, considering a potential 1.6 million tons/vertical metre
(1300 X 500 X 2.5) i.e. 160 million tons of probable ore to 100 metres
depth. However, the feasibility of mining this deposit is open to
question, for it is surrounded by swamps and river systems at 20 metres
above sea level only. Utilising an average height of 25 metres above
swamp level the maximum tonnage of rock ( this includes leached
capping) that could be mined to swamp level is less than 30 million
tons. It is therefore a mining engineers decision as to what, if any,
further work be carried out here, not the geologist's.
<PAGE> 41
6. ALLUVIAL GOLD POTENTIAL
As discussed under 2.1., all previous reports, maps and drilling results are no
longer in existence. Only a fragment of a plan showing some 30 bangka drill
holes with depth of hole and value in pence per cubic yard (date 1962) has been
salvaged. On current day values ($150 U.S./02), the average gold value for these
alluvials is pf the order of U.S.$1-50 per cubic metre. Discussion with Moksin
Lele, formerly with P.T. Silubat suggests that the average depth of the
alluvials is 6 - 7 metres and that they are consistently gold bearing for
greater than 300 metres away from the foot of the hills. A calculated volume for
the numerous alluvial basins adjacent to G. Silubat gives a figure of some 5
million cubic metres, which at $1.50/cu metre is highly significant. Because of
the swampy nature of these alluvials (most of them have been cleared of
vegetation for former rice paddies) a suction cutting dredging method would be
the appropriate means of exploitation. A program of widely spaced bangka holes
(special platforms would need to be constructed to enable these machines to be
used in swampy terrain) should therefore be implemented to confirm these gold
values.
<PAGE> 42
AN EVALUATION OF
SILUBAT GOLD - BASE METAL DEPOSIT
KALIMANTAN BARAT, INDONESIA
R.A. WATTERS
JANUARY, 1982
<PAGE> 43
INTRODUCTION
At the request of Mr. Steven Zagon of P.T. Pnanh Tiara, Jakarta, a visit of a
week's duration was made to Gunung Silubat, Kacamatan Selakau, Kalimantan Barat,
(see inset on Figure 1), for the purpose of assessing what was said to be an
alluvial gold prospect. The K.P. is held by Firma Wahidah Mining and Trading
Company, headed by Mochsin Lele of Singkawang. The area is 62.5 ha and lies
immediately south west of Gunung Silubat.
Location and Access
To get to the prospect, one travels for up to three hours by bitumen road from
[ILLEGIBLE COPY] Singkawang (150 Km) another hour to Simparuk (50 Km), also by
bitumen road. From Simparuk, one rents a motorised prahu and travels up the
River Sebangkau to [ILLEGIBLE COPY] where the smaller river Bakung is then
taken, the total prahu journey taking [ILLEGIBLE COPY] Silubat, provided that
the water is deep enough. If not, one also walks for 2 hours from a sawmill on
the Sungai Bakung.
From Silubat village the foot track to Kolam B takes about 15 minutes to
traverse. The location is at coordinates 1 degree 1'N, 109 degrees 12'E.
[PHOTO 1: Kolam B looking West.]
Previous Work
Chinese exploitation of the deposit took place from the early nineteenth century
[ILLEGIBLE COPY] the Dutch from 1935 until 1940, when 63.3 Kg of gold was
reportedly produced. In 19__ T. Silobat started operations but the
insurgencies of that period caused a [ILLEGIBLE COPY].
<PAGE> 44
Mr. Laurie Whitehouse of P.T. Tropic Endeavour mapped and described the geology
in 1977 took samples of rock and stream sediment.
Messrs. Bennet and Gillham carried out empirical studies over traverse lines up
Hills 1 to 6 (see Figure 3).
Geology (See Figure 1)
A. Lithology
Three main rock types were encountered:
1. Quartz diorite, hornblende with fine magnetite, disseminated
pyrite, occasionally fresh with traces of chalcopyrite. This
rock type crops out over approximately a square kilometre and
is mostly altered and showing evidence of mineralization in
the form of limonite after pyrite.
2. Quartz - feldspar porphyry, manifests itself as crystals of
quartz in saprolite, indicative of a high temperature
subvolcanic origin. Intrusive breccia occurrences can be seen
at the edges. To the west of the prospect, where this
rock-type is mainly evident, a film of white sand occurs on
the top of the soil over and area of approximately 400 m by
150 m i.e. 6 ha.
3. Silstone, greenish-black finegrained siltstone which crops out
on the side on the track from Silubat to the Kolam B,
and between Kolam B and Kolam C. This unit is [ILLEGIBLE COPY]
rock of the acid intrusives and it is likely that a
considerable amount of the mineralisation is contained by it.
B. Structure
From a study of the topography it appears likely that Kolam B is
situated at the intersection of two major fault zones. This would
account for the shape of the hills around that [ILLEGIBLE COPY] which
suggest an ellipsoidal outline with its centre at that locus. It is
perhaps significant that the angle of the two fault zones
approximates two of the joint systems seen in the [ILLEGIBLE COPY]
diorite.
A similar mechanism to that described by Rice (1981) is envisaged, i.e.
that the gold has been diffused along major structure lines,
accompanied by some silicification.
Alteration (See Figure 2)
Alteration occurs over an area of more than 3 km2. Few unaltered rocks
[ILLEGIBLE COPY] of the alteration is evident. This includes propylitic,
argillic and phyllic alterations. It is also possible, as Whitehouse noted, that
potassic alteration might also be widespread but because of surface oxidation
and weathering in the phyllic zones, cannot be recognized. The propylitisation
manifests itself as chlorization of hornblende and epiolotsation in the
diorites. Pyritic mineralisation has accompanied this phase. Argillic alteration
has probably affected the siltstone. Sericite and clay minerals are common.
Phyllic alteration is characterised by intense sericitisation which thoroughly
changes the original texture of the rock.
<PAGE> 45
Mineralisation
In such an environment it is not surprising that strong leaching has taken place
and only in the relatively unaltered zones is fresh pyrite noted. Haematite,
goethite and _________ common in disseminations and in fracture coatings.
Original total sulphide is estimated to be in excess of 5% in altered siltstone
and 2% to 3% diorite and porphyry bodies. Rare chalcocite has been seen
in rocks at the water table and pan concentrates contain non-magnetic
black grains which are thought to be chalcocite.
<PAGE> 46
Work Carried Out
A synthesis of the work of all previous investigations was attempted. Geological
traverses were carried out to get a "feel" for the area and samples of rock
types were taken. Some of these were dollied in a period of time specially
manufactured in Singkawang, and washed to a concentrate representing
approximately 1 kg of original material. These concentrates were submitted to
Rio Tinto, Jakarta, for analysis of (Au), Ag, Cu Pepto-Bismol and Zn.
Several rocks contained fresh suphides, mainly pyrite, arsenopyrite,
chalcopyrite.
A C-Scope metal detector was employed on some traverses and some boulders gave a
detection sound, but when the iron discrimination switch was brought in, the
sound disappeared. It is unlikely that lumps exist which are large enough to be
detected by the machine.
Six large samples, between 0.2m3 and 0.5m3, were taken and sluiced with the
existing equipment. The concentrate was cleaned up using a Garrett gold pan
(with gravity traps), the gold separated and weighed on a balance bought for the
purpose in Singkawang.
Four heavy mineral concentrates were collected from small creeks running off the
most south-western hill of the prospect. These samples represented approximately
5 Kg of original sample. As for the rock concentrates, they were weighed and
taken to Jakarta. Their locations as well as compilation of all sample
locations, are show on the accompanying map, (Figure 1).
[PHOTO II: Kolam B and work site from locations S1 and 2.]
Whitehouse pointed out that the average Au in dioritic rocks over an area of 65
ha was 0.33 ppm. Utilising a 4:1 Cu/Au, i.e. 1 ppm (Au) in leached capping
represents 4% Cu, quoting [ILLEGIBLE COPY] OK Tedi, Philippines and Cabang Kiri,
a hypogene grade of 1.3% and 1.6 million tons per vertical metre could be
expected. This author sees no reason to disagree with this contention as
visibly seen below.
<PAGE> 47
As mentioned before, a study of the physiography suggests that two faults
intersect at [ILLEGIBLE COPY]. One runs from Kolam C through B and over the
saddle, passing just east of BB31 and west [ILLEGIBLE COPY].
[PHOTO III: Kolam C from location S4.]
Near BB31, rocks of different appearance are exposed on either side of a small
[ILLEGIBLE COPY] was a reddish-brown, highly oxidised, lateritised rock which
could be fault [ILLEGIBLE COPY] occurred in S2, a well-jointed acid volcanic
which was very silicic. Blue-black [ILLEGIBLE COPY] occurred as a coating on
quartz crystals in a fracture filling.
The second suggested fault is striking north-northeast south-southwest from
Silobat through Kolam B to the southern bank of Kolam A. It is probably more
than a coincidence that _____ in the area are mostly at a similar angle to
these two suggested faults.
The overall synthesis of the area suggests that interesting possibilities exist
for a sizeable porphyry copper-gold deposit. A sample (S3) of what is probably
leached capping was taken from the top of the hill above BB31 South of Kolam B.
A similar capping occurs on through above BB2 3 north of Kolam B. It is white,
kaolinised, with reminents of Fe minerals.
Negative results of some of the earlier work cannot necessarily be believed
because of pilfering and because of analytical error. The good results are more
likely to be correct, particularly these analysed in Bandung. Gold analysis and
sample preparation are particularly tricky and work done in the seventies is
often suspect.
Some of the samples taken by the Department of Mines team marked SS, mixture of
stream sediments and residual soils. All those results believed to be
significant and shown in Figure 1. It must be noted that none of the Department
of Mines results of SS samples was related back to weights of samples and of
concentrates. However, experience tells that values of three figures or more in
such concentrates, is usually significant.
<PAGE> 48
Check assay were carried out for gold which had not originally been detected in
the rocks and values ranged form 0.05 to 0.81 ppm with an average in diorite of
0.33 ppm.
Whitehouse gave an average of 0.3 g/m3 for the alluvial potential, which is in
accord with the above.
DISCUSSION
Sample S2 contained high base metals and this is in accord with the high ferric
hydroxide content of this material. It probably represents pyritic fault gouge
which would have contained chalcopyrite, galena and sphalerite originally.
It is plain that silver is not totally allied to the gold content, although
sample S10 seems to have a strong liaison.
Base metals in the stream sediment concentrates are very low but gold even in
the original 5 kg sample is largely highly anomalous.
Frank Gillham and Merton Bennet took many samples on traverses in the vicinity
of Kolam S, and the great majority contained some visible gold, albeit not
enough to quantify to any way. Some were, however, obviously better than others,
notably those designated Hills 1, 5 and 6.
From the combination of all results, it is interpreted that the
colluvial/proluvial possibilities are good in the two areas between the three
kolams. For example, the Department of Mines found over 7 metres of 9.5 g/m3
near Koam C. The problem is how to extract it, as the ground is waterlogged
throughout the two areas.
Even though there were check analyses carried out, there must be some lingering
doubt about the gold analyses recorded by Whitehouse, but the geology and
alteration he has recorded appear essentially accurate. These are shown in
Figures 2 and 3 with some minor corrections.
Other areas which appear attractive are:
1. Drainage basin No. 39
2. Drainage basin No. 17 and the north side of that ridge (containing
BB31)
3. Drainage basin No. 16
4. Drainage basin No. 2
5. (?) Drainage basin No. 25 (24?, since there is no result for No.
25) south of Silubat.
Extensive diggings occur on the sides of the areas between kolams and it is
obvious that the early exploitation concentrated on these base of slope areas.
Boyle, however, points out that the eluvial areas, the gold and other
heavy minerals often lag behind uphill a little.
<PAGE> 49
Results
Visible gold occurred in all samples of eluvial material, i.e. B1, B2, S4, 5, 6,
and 8. The rock and stream concentrates were not measurable but gold was seen in
S3, 9, 10, and 11, (stream concentrates). Concentrations were less than 0.1 ppm
by visual estimation.
The weights of gold and concentrations were as follows:
<TABLE>
<CAPTION>
Sample No. Approx. m3 qm Au Concentration (g/m3)
<S> <C> <C> <C>
B1 0.5 0.10 0.20
B2 0.5 0.10 0.20
S4 0.2 0.005 0.025
S5 0.5 0.10 0.20
S6 0.5 0.10 0.20
S7 0.03 0.015 0.05
S12 0.4 0.04 0.10
</TABLE>
Analytical Results (ppm in concentrate)
<TABLE>
<CAPTION>
Sample No. Cu Pb Zn Ag Au Au
original
<S> <C> <C> <C> <C> <C> <C>
S1 ) 55 263 20300 2.3 0.8 .002
2 ) Rock 253 158 2060 17.1 4.4 .055
3 ) Chip 62 159 1200 6.2 19.5 .022
8 ) 2.7 54 19 8.3 47.1 .07
9 ) Stream 1.9 11 28 2.9 12.4 .026
10 ) Sediment 9.4 47 66 49.2 140.5 [ILLEGIBLE
COPY]
11 ) 3.4 20 26 1.3 1.5 .004
</TABLE>
Further extraction was carried out by Meron Bennet after some of the previously
washed material had had a chance to sit in water for a week, and 0.3g Au was
obtained from about 1-2m3.
A total of 16m3 from 0 to 0.5m depth was processed for a gain of 4.5g Au, i.e.
almost 0.3g/m3 also. A further 2.5m3 of deeper material (0.5 - 1.0m depth)
yielded 1g.Au, i.e. 0.4g/m3.
Thus, the yields are of the order of 0.3g/m3 with a similar amount or more
passing over the riffles in the clay material.
It is reasonable to suppose that good equipment would extract up to a gram of
gold per cubic metre, while Whitehouse figure of 0.33g per ton for hard rock in
bulk begins to look remarkably realistic.
Geochemistry
In spite of the fact that most of the gold assays from Whitehouse cannot relied
upon, the base metals are perhaps more credible, and some support for a mineral
deposit can be seen with Cu, Pb and Zn in stream sediments. Gold in concentrates
from soils are also consistently high but no means of quantifying these results
could be found, as noted above.
<PAGE> 50
He took 21 rock chip and 7 stream sediment samples and all of the latter
contained visible free gold as did all 4 taken during this last
visit. Copper in rocks was up to 140 ppm with maxima of 20 ppm MO, 385
ppm Pb and 106 ppm Zn also recorded. Up to 1 ppm Au was also found.
<PAGE> 51
BIBLIOGRAPHY
1. Boyle, R.W., 1980, the Geochemistry of Gold and its Deposits, Canadian
Geological Survey, Ottawa.
2. Kitaisky, Y, 1964, Prospecting for Minerals, Mir Publishing, Moscow.
3. Lubis M., 1980, Report by Direktorat Teknik Pertambangan (unpubl.).
4. Rice, R., 1981, Gold Exploration - past and future B.11. I.M.M. 90,
p.a. 128
5. Van Bermmelen, R.W., 1970, the Geology of Indonesia, Martinus Nijhoff,
the Hague, (2nd ed.).
6. Whitehouse L., 1977 Report on a visit to G. Silubat (unpubl.).
<PAGE> 52
DEVELOPMENT AGREEMENT
COAL MINING PROJECTS IN EAST KALIMANTAN
[SEAL]
This Development Agreement (Agreement) is made and entered into on this seventh
day of January, 1997 by and between:
PT. Andhika Mutiara Sejahtera, a limited liability company established and
validly existing under Indonesia law, and having its address at Jl. Langsat
No.59 Komp. Samarinda - Indonesia (hereinafter referred to as "Andhika"), and is
represented in this Agreement by its' President Director, Mr. Adnan AS; and
Singkamas Agung Ltd., a Bahamas Corporation having its' registered offices in
the Bahamas and its representative offices in Singapore (hereinafter referred to
as "Singkamas"), and is represented in this Agreement by its' President
Director, Mr. William Chan.
(Andhika and Singkamas are hereinafter referred to collectively as "The
Parties").
WITNESSETH
Whereas, the Government of Indonesia acting through its' Ministry of Mines and
Energy and the Directorate General of General Mining (hereinafter referred to as
the "DGGM") wishes to expand on its enhanced exploration for coal and other
natural resources during the next Sixth Development Plan (known as Repelita VI)
and beyond, and encourages the private sector to participate in such
exploration, development, exploitation and production; and
Whereas Singkamas is actively seeking to acquire coal mining concessions and to
implement coal mining activities in East Kalimantan, Indonesia (hereinafter to
as the "Project"); and
Whereas Andhika has successfully reserved, or "blocked", one (1) potential cola
mining property in the coal mining district of East Kalimantan. The geographical
location of such property is described in Exhibit I. Andhika can successfully
demonstrate that it has officially blocked this area of land at the DGGM through
its' official and complete filings and payments to the DGGM for this area. These
official
<PAGE> 53
[SEAL]
documents are attached in Exhibit II. Currently, Andhika controls the rights to
this property and is in the process of obtaining the government approvals and/or
mandates (hereinafter referred to as the "Government Licensee"), which are to be
issued in the form of Contracts of Work (hereinafter referred to as a "CoWs"),
for the development and exploitation of the coal mining property. Andhika also
recognizes the importance of obtaining any other government licenses associated
with the exploitation of coal, including the license for the refinery and
production of coal as well as the transportation and sale of coal; Andhika will
use its' expert abilities and efforts to obtain these additional licenses from
the Government in order to facilitate the development, implementation, and
success of the Project; and
Whereas both Parties agree to use their best efforts to complete the sale and
acquisition of the Property (hereinafter referred to as the "Transaction"),
which includes the rights to the government licenses for exploration and
exploitation of coal on the Property. The Parties also agree to jointly
cooperate to successfully obtain any other government licenses which will be
necessary; and
Whereas the Coal Mining Property (hereinafter referred to as the "Property") is
located in the coal mining district of East Kalimantan, Indonesia and,
potentially, has substantial deposits of coal and other natural resources. The
property encompasses a combined total of approximately 104,700 hectares of land.
A geographical description of the Property is provided in Exhibit I which is
attached to this Agreement. The Property is located in a coal mineralization
zone and, through official flings and monetary payments made to the DGGM (which
includes both filing and annual fees as well as seriousness bonds), Andhika has
secured the rights to the Property and is in the process of obtaining the
government licenses for the general survey and exploration of coal on the
Property as well as the CoWs to exploit coal on the Property. These documents
are shown in Exhibit II which is attached to this Agreement.
DESCRIPTION OF THE PROPERTY : 104,700 HECTARES
The Property consists of approximately 104,700 hectares of land. For this block
of property, Andhika has properly filed, paid for, and obtained the rights to
this area. Andhika is also currently in the process of obtaining the CoWs to
explore and exploit coal on the property. See Exhibit II.
For purposes of this Transaction, Mr. Adnan AS, as President Director of PT
Andhika Mutiara Sejahtera, has been granted the complete and/or official
authorization, through a General Shareholder's Meeting (subject to provision in
the Articles of Association), to sell 77.5% of Andhika's interest in the
Property, including the complete transfer of the government rights (when
obtained) to explore and exploit for coal on the Property. The Shareholder's
Minutes are referenced in Exhibit III which is attached to this Agreement.
Although Andhika will actively seek to obtain the government licenses
2
<PAGE> 54
[SEAL]
for the commercial exploitation of coal (including the licenses for the refinery
production, transportation, and sale of coal), Andhika recognizes that these
government licenses will also be transferred to Singkamas or to some third party
which is appointed by Singkamas.
Andhika will use its' expert abilities and efforts for obtaining the government
licenses from the DGGM. The purposes of obtaining all of the necessary licenses
is to make terminal ileum feasible for Singkamas to effectively and efficiently
mine the Property and to make it into a world-class profitable operation.
Whereas Singkamas has the ability to provide and/or secure financing to acquire
77.5% interest in the Coal Mining Property and the related government licenses
from Andhika as well as the ability to develop the Property into a world-class
mining operation.
Now therefore, the Parties hereto agree as follows:
1. COOPERATION
In accordance with the Government approvals which have already been granted to
Andhika, the parties agree as follows:
1.1 To submit additional application(s), as necessary, to the DGGM for the
licenses and/or CoWs for the exploration and exploitation of coal on
the Property.
1.2 To complete the acquisition of the Property.
1.3 To support, develop, and complete the mining operations.
2. EXCLUSIVITY
Except as otherwise provided for in this Agreement, the Parties warrant that
they shall cooperate solely and exclusively with each other in connection with
this Coal Mining Project and that nontender of them shall enter into any
agreement with any other firm or group of firms with respect to any matters
related to this Project without the prior written consent of the other Party and
to keep this information strictly confidential. Further, Andhika will grant
Singkamas a first rights of refusal with respect to any coal mining property
which it may control, influence the sale of, or be able to recommend to
Singkamas.
The parties also warrant that such exclusivity will be respected by those
persons or firms which they may exercise control or with their affiliate in any
manner.
3
<PAGE> 55
[SEAL]
3. SPONSORSHIP
Andhika shall activity as the main sponsor of this Project. In this regard,
Andhika has obtained the complete and proper approvals (which are subject to
legal verification) to transfer 77.5% interest in the Property, which includes
the full and complete rights to any Government Licenses which Andhika will
receive for the exploratoin and exploitation of coal on the Property. All
geological and other significant information will be made available to the
Parties on a continual basis. Furthermore, Andhika will obtain any other
necessary and appropriate government licenses associated with the refinery and
production of coal as well as the transportation and sale of coal. Similarly,
these licenses will also be transferred to Singkamas or its' designee.
4 INITIAL RESPONSIBILITIES
The Parties agree that their responsibilities shall be as follows:
4.1. Andhika will secure the proper approvals to sell its' rights to the
Property as well as its' rights to the Government Licenses.
Andhika will assist with the development of the Project in conjunction
with the Parties as need. In particular, Andhika will take all steps
necessary or deemed advisable by Singkamas to secure the CoW for the
exploitation of coal on the Property. Andhika has reviewed preliminary
geological surveys on the Property and will provide all of this
information as well as all future information to the Parties on a
continual basis. Andhika will give Singkamas first priority/option for
any future coal mining opportunities for acquisition and/or for working
together in seeking other coal mining projects. In particular, Andhika
must give first priority to Singkamas to acquire any additional
property which are contiguous with the current property. In those
instances where these contiguous property and/or other property region
are owned and/or controlled by friends, families, and/or directors of
other local PT. Companies which are associated with Andhika, Andhika
must give priority to Singkamas to acquire such property, if available.
4.2 Sigkamsa will be responsible to provide and/or secure financing for the
Project, provide world-class technologies and management/exploration
teams and, if necessary, a strategic operator(s) to develop the
Property Singkamas will jointly assist the Project with Andhika.
4.3 Singkamas may appoint a qualified Indonesian party to accept the
transfer of CoW and may at any time at its discretion cause or permit
such party to transfer such property and licenses to any third party
based on prevailing regulations and subject to Anugrah's continuing
rights under the Agreement being respected by such transferee.
4
<PAGE> 56
[SEAL]
5. TRANSFER OF LICENSES
5.1 Andhika will transfer 77.5% interest of coal minerals on the Property.
Furthermore, Andhika's principals and/or affiliates will not compete
with Singkamas.
5.2 Payment For:
(a) Anhika agrees to sell 77.5% if its interest in the Property as
well as its' full and complete rights to the Government
Approvals to such qualified party as indicated by Singkamas
that may be appointed for the price of US One Million Dollars
(US$1,000,000).
(b) All payments hereunder shall be subject to continual
fulfillment by Andhika of its obligations under this
Agreement.
5.3 Payment Conditions:
(a) Singkamas agrees to make a down payment of US$200,000
after the signing of this Agreement. This payment,
however, is subject to legal verification that the
title to the Property is acceptable and without
encumbrances and that the government license issued to
Andhika is current and valid. Such payment will be
made to Andhika once the test results from the initial
investigation/exploration activity are completed and
any other legal verifications, which may be required in
respect of title to the Property and validity of
government licenses are finalized.
(c) The final payment of US$1,500,000 will be immediately paid to
Andhika upon the coal mines being put into the production
stage and are generating positive revenues. For this to occur,
however, Andhika must first secure the complete and proper
CoW.
Anhika recognize that once it secures CoW for the benefit of
the Parties and, moreover, the benefit of the Project, Andhika
will transfer the full and complete rights of CoW to Singkamas
or the entity appointed by Singkamas.
5.4 Profit Sharing
The Parties hereby agree that the Profit Sharing from the net profit
(total revenue minus all expenses including taxes) to the Project shall
be as follows:
5
<PAGE> 57
[SEAL]
Singkamas 77.5%
Andhika 22.5%
5.5 Reimbursement of Expenses
Singkamas agrees to relinquish to or reimburse Andhika for the funds
which Andhika expended towards the Seriousness bond which it paid to
the DGGM for blocking the property. These funds amount to a total of
Rp. 1,094,000,000. Receipts for these expenses are referred in Exhibit
IV. Terms and Conditions for the reimbursement of these expenses are to
be determined by the Parties.
5.6 Exploration Program
(a) Singkamas agrees to begin the Exploration Program on the
Property by February 1997 or sooner.
(b) Singkamas will dig numerous test pits as part of the
exploration program.
(c) Shallow drilling to the depth of 50-60 meters will also be
carried out over time second 90-day period.
(d) Deep drilling to depth of 200 meters will also be carried out
over the second 90-day period.
(e) Singkamas agrees to finance the Exploration Program for the
development and implementation of the Coal Mine Project. In
this regard, Singkamas agrees to spend a minimum of US$100,000
in year 1; US$100,000 in Year 2; and US$100,000 in Year 3.
Accounting record for these expenditures will be kept by
Singkamas.
6 JURISDICTION
6.1 (a) Any dispute or controversies which may arise out of this
Agreement shall be amicably settled by the Parties, but in
failure thereof, such disputes or controversies shall be
referred to the arbitration of the Rules of Badan Arbitrasi
Nasional Indonesia (BANI). The arbitration panel shall consist
of three (3) arbitrators, one (1) chosen by the complainant,
one (1) chosen by the respondent and a Chairman chosen by the
arbitrators named by the complainant and the respondent.
(b) The parties expressly agree that (1) the arbitration tribunal
shall decide the matter as expeditiously as possible, however,
no time limits shall be imposed, (ii) Section 631 of the R.V.
(Reglement opde Rechtsvordering)
6
<PAGE> 58
[SEAL]
shall apply, and that accordingly the arbitrators shall only
reach their decision by applying strict rules of law to the
facet and shall not purport to resolve any dispute exaequo et
bono, (iii) the arbitration shall be conducted the English
language, in Jakarta, Indonesia or such other place or places
in Indonesia, as the Parties to the arbitration may agree,
(vi) the Party in whose favor the arbitral award is rendered
shall be entitled to recover costs and expenses of the
arbitration including but not limited to the cost and expense
of administration of the arbitration proceedings, and (v) the
arbitral award shall be issued in Indonesia.
(c) The Parties expressively agree to waive section 641 of the
R.V. and any other applicable laws permitting appeal to courts
of law or any other body so that accordingly there shall be no
appeal to any court of law or any other body from the decision
(or any interim decision) of the arbitrators and neither party
shall dispute nor question such decision before any judicial
authority in the Republic of Indonesia of elsewhere.
(d) Pending the submission to arbitration and thereafter until the
arbitration tribunal issues its decision, each Party shall,
expect in the event of expiration, termination or failure by
the other party to obey or comply with a specific order or
decision of the arbitration tribunal, continue to perform all
of its obligations under this Agreement without prejudice to a
final adjustment in accordance with the said award.
6.2 This Agreement as to its' interpretation and application shall be
governed by the Laws of Indonesia.
6.3 The Parties hereby expressly agree to waive the provision of Article
1266 of the Indonesian Civil Code with respect to the need for a court
pronouncement to terminate this Agreement.
7. TERM OF VALIDITY
7.1 This Agreement shall be in effect as of January 7th, 1997, and shall be
valid until the purposes and objectives of the Project have been
fulfilled.
7.2 If for any reasons the transfer of the Property is not approved by the
Government Authorities within six (6) months after the date of this
Agreement, Singkamas shall have the option to terminate this Agreement
with no further liability hereunder.
7
<PAGE> 59
[SEAL]
8. OTHER MATTERS
Other matters not stipulated in this Agreement shall be further discussed and
decided later on through mutual discussion between the Parties on the basis of
this Agreement.
In Witness Whereof, the Parties agree that this Agreement is legal and binding
and have caused their duly authorized representatives to execute this Agreement
on the year and the first above stated.
PT. ANDHIKA MUTIARA SEJAHTERA SINKAMAS AGUNG LTD.
[SEAL]
By /s/ By /s/
--------------------------- -------------------
Name: Adnan AS Name: William Chan
Title: President Director Title: President
Director
Number : 20.190/1997/Leg.
- - -Seen for the signing of the signatures of :
- - -Mr. ADNAN ALAMSYAH SULAIMAN, Indonesian ---
Citizen, private person residing in --------
Samarinda, Jalan Rawa Indah B3/No.9, Rt.52,-
Rw.08, holder of Identity Card Number : ----
03.1002/2714/00931/1995, temporarily being -
in Jakarata; -------------------------------
- - -Mr. WILLIE CHAN HUA BENG, Singapore Citizen,
private person, holder of Passport Number :
S 1852289-F, temporarily being in Jakarta; -
both are known to me, BUNTARIO TIGRIS ------
DARMAWA,NG.SH.CN. by virtue of decision-----
Letter from the Minister of Justice of the -
Republic of Indonesia dated on the thirteenth
day of April one thousand nine hundred and -
ninety five ( 13-4-1995 ) number : C-59.HT.
03.07-Th.1995, substitute of RACHMAT SANTOSO,
SH. Notary in Jakarta.----------------------
Jakarta, 7th January 1997
Substitute Notary in Jakarta.
[SEAL] /s/
( BUNTARIO TIGRIS DARMAWA, NG.SH.CN. )
8
<PAGE> 60
LIST OF EXHIBITS
EXHIBIT I DESCRIPTION OF THE PROPERTY
EXHIBIT II GOVERNMENT FILINGS
EXHIBIT III SHAREHOLDER'S MINUTES
EXHIBIT IV RECEIPTS
<PAGE> 61
EXHIBIT I
DESCRIPTION OF THE PROPERTY
<PAGE> 62
[MAP]
<PAGE> 63
[TRANSLATION NOT CURRENTLY AVAILABLE, BUT WILL BE PROVIDED BY AMENDMENT.]
Lampiran I : Keputusan Direktur Jenderal Pertambangan Umum [SEAL]
Nama Perusahaan : PT. ANDHIKA MUTIARA SEJAHTERA
Lokasi
- - - Propinsi : KALIMANTAN TIMUR
- - - Kabupaten : KUTAI
- - - Kecamatan : -
- - - Kode Wilayah : APB042
Luas : 104.700 Ha
<TABLE>
<CAPTION>
No. Titak Garis Bujur Garis Lintang
. ' " . ' " LU/LS
<S> <C> <C> <C> <C> <C> <C> <C>
1 117 13 0.0 1 15 0.0 LU
2 117 30 0.0 1 15 0.0 LU
3 117 30 0.0 1 10 0.0 LU
4 117 35 0.0 1 10 0.0 LU
5 117 35 0.0 1 0 0.0 LU
6 117 13 0.0 1 0 0.0 LU
</TABLE>
Direktur Jenderal Pertambangan Umum
Kuntoro Mangkusbrot
<PAGE> 64
EXHIBIT II
GOVERNMENT FILINGS
<PAGE> 65
[TRANSLATION NOT CURRENTLY AVAILABLE, BUT WILL BE PROVIDED BY AMENDMENT.]
T A N D A T E R I M A
Nomor: 300/SDPH/1996
A. Permohanan (aplikasi) dari : PT. Andhika Mutiara Sejahtera
Tanggal : 13 Mei 1996
Alamat : Komp. Pinang Babaris Blok A/47
Samarinda
Telp. (0541) - 41974
Diterima hari/tanggal/Jam : Senin/13 Mei 1996/15.30
Perihal : Permohonan Kontrak Karya
Batubara di daerah Propinsi
Kalimantan Timus, Kabupaten
Kutai.
Seluas 104.700 Ha
Kode Wilayah : 96APB226
B. Lampiran - lampiran n :
1. Peta wilayah (asli) dari Unit Pelayanan Informasi dan
Pencadangan Wilayah Pertambangan (UPIPWP)...............: ada
2. Tanda bukti penyetoran jaminan kesungguhan dari Bank
yang ditunjuk...........................................: ada
3. Tanda terima SPT tahun terakhir.........................: ada
4. Laporan Keuangan 3 (tiga) tahun terakhir yang telah
diaudit oleh Akuntan Publik :
- Perusahaan Asing......................................: ---
_ Perusahaan Indonesia..................................: ada
5. Kesepakatan ersama (MOU) jika pemohon diajukan lebih
dari 2 pemohon..........................................: ada
6. Laporan tahunan perusahaan..............................: ada
Permohanan tersebut telah dilampiri persyaratan sesuai ketentuan yang berlaku
untuk diteruskan ke Direktur Batubara.
Jakarta, 13 Mei 1996
Kepala Bagian Perundang-
Undangan
[SEAL [S]
Yusmid AP, SH.
NIP. 100002520
Tembusan :
- - - Unit Pelayanan Informasi Pencadangan Wilayah Pertambangan
(UPIPWP)
<PAGE> 66
[TRANSLATION NOT CURRENTLY AVAILABLE, BUT WILL BE PROVIDED BY AMENDMENT.]
Kepada : Yth.bapak Yusmet.
Dari : Riduansyah Basri.
No. Facs : 021.5250895
[SEAL]
APLIKASI
ELECTRONIC FUNDS TRANSFER
No. Ref: 182 063 051376 42648 Direktur Jenderal Pertambangan
PT. Andhika Mutiara Sejahtera Umum qq dan Andhika Mutiara
Jl. Rawa Indah Blok B RT 52 Sejahtera prp BDN Cahung Wiama
RW 08 Samarinda Raja Jl. Gatot Subroto Kav. 54
Jkt.700.087.06025.2.01.
004143.001
BNI Cabang Senayan Jkt.
BMI Cabang Samarinda
Yg.dikirim Rp.1.094.000.000.-
Rp. 1.094.005.000.
satu milyard sembilan
puluh empat juta sebalas ribu Rp. 6.000.
rupiah
Rp. 1.094.011.000.
<PAGE> 67
EXHIBIT III
SHAREHOLDER'S MINUTES
<PAGE> 68
[SEAL]
MINUTES OF GEN MEETING OF FOUNDERS
OF
PT ANDHIKA MUTIARA SEJAHTERA
On this day, the fifteenth of December one thousand nine hundred
ninety-six (15-12-1996), a Gen Meeting of Founders ("Meeting") of PT. ANDHIKA
MUTIARA SEJAHTERA ("the Company") was held at Plaza Exim, 24th Floor, Jl.
Jendral Gatot Soebroto Kav.36-38, Jakarta, 12910.
The Company was established by Deed No. 11, dated 1 April 1996 made by
Haji Gunawan, SH, Notary in Samarinda, such deed has not been approved yet by
the Minister of Justice of the Republic of Indonesia (herein after referred to
as the "Articles of Association")
Present in this Meeting:
1. Sri Aslinda Sulaiman, as the holder of 280 shares of the Company.
2. Drs. Ardiansyah Sulaiman, as the holder of 280 shares of the Company.
3. Andra Fahreza Ardans, as the holder of 280 shares of the Company.
That in this Meeting there were represented 840 shares, which represent all of
the subscribed and issues shares in the Company so that based on Article 20 of
Articles of Association of the Company, this meeting is duly convened and has
the power to make valid decision with respect to all matters which are to be
discussed, even though there was no written call of the Meeting.
The Chairman further explained to the Meeting that the agenda of the
Meeting is the transfer of the property and interest of the Company in
Kontrak Karya Batu Bara KW APB042 (KKB) and any government licenses
with regard to such KP to Singkamas Agung, Ltd or any other party
appointed by Singkamas Agung, Ltd.
In respect to the above-mentioned Agenda, the Chairman, after giving a
complete explanation, subsequently proposed to the Meeting and the
Meeting, after due discussion, unanimously voted to approve and
therefore decides to declare the transfer of the property and interest
in Kontrak Karya Batu Bara KW APO585 and any government licenses with
regard to such KKB to Singkamas Agung, Ltd or any other party appointed
by Singkamas Agung, Ltd was approved by founders ft Company.
[SEAL]
The Meeting hereby authorizes the Board of Directors of the
<PAGE> 69
Company with the right of substitution, to appear before a Notary to state the
resolutions resolved hereunder in notarial deed and to appear wherever
necessary, to give information, to make, to cause to be made and signed, all
necessary letters/documents, and further to perform all actions deemed proper
and useful for the completion of the above-mentioned matters.
Since no other matters to be discussed in this Meeting is closed by the
Chairman at 16.00 West Indonesian Time.
Chairman Shareholders
[SEAL] [S] [S]
- - -------------------- ------------------------
Sri Aslinda Sulaiman Drs. Ardiansyah Sulaiman
Shareholders
- - --------------------
Andra Fahreza Ardans
<PAGE> 70
EXHIBIT IV
RECEIPTS
<PAGE> 71
[TRANSLATION NOT CURRENTLY AVAILABLE, BUT WILL BE PROVIDED BY AMENDMENT.]
Kepada : Yth.bapak Yusmet.
Dari : Riduansyah Basri.
No. Facs : 021.5250895
[SEAL]
APLIKASI
ELECTRONIC FUNDS TRANSFER
No. Ref: 182 063 051376 42648 Direktur Jenderal Pertambangan
PT. Andhika Mutiara Sejahtera Umum qq dan Andhika Mutiara
Jl. Rawa Indah Blok B RT 52 Sejahtera prp BDN Cahung Wiama
RW 08 Samarinda Raja Jl. Gatot Subroto Kav. 54
Jkt.700.087.06025.2.01.
004143.001
BNI Cabang Senayan Jkt.
BMI Cabang Samarinda
Yg.dikirim Rp.1.094.000.000.-
Rp. 1.094.005.000.
satu milyard sembilan
puluh empat juta sebalas ribu Rp. 6.000.
rupiah
Rp. 1.094.011.000.
<PAGE> 72
DEVELOPMENT AGREEMENTS
COAL MINING PROJECTS IN EAST KALIMANTAN
[SEAL]
This Development Agreement (Agreement) is made and entered into on this seventh
day of January, 1997 by and between:
PT. Andhika Mutiara Etam, a limited liability company established and validly
existing under Indonesia Law, and having its address at Jl. Langsat No. 59 Komp.
Samarinda - Indonesia (hereinafter referred to as "Andhika"), and is represented
in this Agreement by it's President Director, Mr. Adnan AS; AND
Singkamas Agung, Ltd., a Bahamas Corporation having it's registered offices in
the Bahamas and it's representative offices in Singapore (hereinafter referred
to as "Singkamas", and is represented in this Agreement by it's President
Director, Mr. William Chan.
(Andhika and Singkamas are hereinafter referred to collectively as "The
Parties").
WITNESSETH
Whereas, the Government of Indonesia acting through it's Ministry of Mines and
Energy and the Directorate General of General Mining (hereinafter referred to as
the "DGGM") wishes to expand on its enhances exploration of exploitation for
coal and other natural resources during the Sixth Development Plan (known as
Repelita VI) and beyond, and encourages the private sector to participate in
such exploration, development, exploitation and production; and
Whereas Singkamas is actively seeking to acquire coal mining concessions and to
implement coal mining activities in East Kalimantan, Indonesia (hereinafter
referred to as the "Project"); and
Whereas Andhika has successfully reserved, or "blocked", one (1) potential coal
mining property in the coal mining district of East Kalimantan. The geographical
location of such property is described in Exhibit I. Andhika can successfully
demonstrate that it has officially blocked this area of land at the DGGM through
it's official and complete filings and payments to the DGGM for this area. These
official
<PAGE> 73
[SEAL]
documents are attached to Exhibit II> Currently, Andhika controls the rights to
the property and is in the process of obtaining the government approvals and/or
mandates (hereinafter referred to as the "Government License"), which are to be
issued in the form of Contracts of Work (hereinafter referred to as a "CoWs'),
for the development and exploitation of the coal mining property. Andhika also
recognizes the importance of obtaining any other government licenses associated
with the exploitation of coal, including the license for the refinery and
production of coal as well as the transportation and sale of coal; Andhika will
use it's expert abilities and efforts to obtain these additional licenses from
the Government in order to facilitate the development, implementation, and
success of the Project; and
Whereas both Parties agree to use their best efforts to complete the sale and
acquisition of the Property (hereinafter referred to as the "Transaction"),
which includes the rights to the government licenses for the exploration and
exploitation of coal on the Property. The Parties also agree to jointly
cooperate to successfully obtain any other government licenses which will be
necessary; and
Whereas the Coal Mining Property (hereinafter referred to as the "Property") is
located in the coal mining district of East Kalimantan, Indonesia and,
potentially, has substantial deposits of coal and other natural resources. The
property encompasses a combined total of approximately 71,420 hectares of land.
A geographical description of the Property is provided in Exhibit I, which is
attached to this Agreement. The Property is located in a coal mineralization
zone and, through official filings and monetary payments made to the DGGM (which
includes both filing and annual fees as well as seriousness bonds), Andhika has
secured the rights to the Property and is in the process of obtaining the
government licenses for the general survey and exploration of coal on the
Property as well as the CoWs to exploit coal on the Property. These documents
are shown in Exhibit II, which is attached to this Agreement.
DESCRIPTION OF THE PROPERTY: 71,420 HECTARES
The Property consists of approximately 71,420 hectares of land. For this block
of property, Andhika has properly filed, paid for, and obtained the rights to
this area. Andhika is also currently in the process of obtaining the CoWs to
explore and exploit coal on the property. See Exhibit II.
For purposes of this Transaction, Mr. Adnan AS, as President Director of PT
Andhika Mutiara Etam, has been granted the complete and/or official
authorization, through a General Shareholder's Meeting (subject to provision in
the Articles of Association), to sell 77.5% of Andhika's interest in the
Property, including the complete transfer of the government rights (when
obtained) to explore and exploit for coal on the
[SEAL]
Property. The Shareholder's Minutes are referenced in Exhibit III, which is
attached to this Agreement. Although
<PAGE> 74
Andhika will actively seek to obtain government licenses for the commercial
exploitation of coal (including the licenses for the refinery production,
transportation, and sale of coal), Andhika recognizes that these government
licenses will also be transferred to Singkamas or to some third party which is
appointed by Singkamas.
Andhika will use it's expert abilities and efforts for obtaining the government
licenses from the DGGM. The purposes of obtaining all of the necessary licenses
is to make it feasible for Singkamas to effectively and efficiently mine the
Property and to make them into a world-class profitable operation.
Whereas Singkamas has the ability to provide and/or secure financing to acquire
77.5% interest in the Coal Mining Property and the related government licenses
from Andhika as well as the ability to develop the Property into a world-class
mining operation.
Now, therefore, the Parties hereto agree as follows:
1. COOPERATION
In accordance with the Government approvals which have already been granted to
Andhika, the parties agree as follows:
1.1 To submit additional application(s), as necessary, to the DGGM for the
licenses and/or CoWs for the exploration and exploitation of coal on
the Property.
1.2 To complete the acquisition of the Property.
1.3 To support, develop, and complete the mining operations.
2. EXCLUSIVITY
Except as otherwise provided for in this Agreement, the Parties warrant that
they shall cooperate solely and exclusively with each other in connection with
this Coal Mining Project and that none of them shall enter into any agreement
with any other firm or group of firms with respect to any matters related to the
Project without the prior written consent of the other Party and to keep this
information strictly confidential. Further, Andhika will grant Singkamas a first
rights of refusal with respect to any coal mining property which it may control,
influence the sale of, or be able to recommend to Singkamas.
The Parties also warrant that such exclusivity will be respected by those
persons or firms which they may exercise control or with their affiliate in any
manner.
[SEAL]
3. SPONSORSHIP
Andhika shall act as the main sponsor of this Project. In this regard, Andhika
has obtained complete and proper approvals (which are subject to legal
verification) to transfer 77.5% interest in the Property, which includes the
full and complete rights to any
<PAGE> 75
Government Licenses which Andhika will receive for the exploration and
exploitation of coal on the Property. All geological and other significant
information will be made available to the Parties on a continual basis.
Furthermore, Andhika will obtain any other necessary and appropriate government
licenses associated with the refinery and production of coal as well as the
transportation and sale of coal. Similarly, these licenses will also be
transferred to Singkamas or it's designee.
4. INITIAL RESPONSIBILITIES:
The Parties agree that their responsibilities shall be as follows:
4.1 Andhika will secure the proper approvals to sell it's rights to the
Property as well as it's rights to the Government Licenses.
Andhika will assist with the development of the Project in conjunction
with the Parties as needed. In particular, Andhika will take all steps
necessary or deemed advisable by Singkamas to secure the CoW for the
exploitation of coal on the Property. Andhika has reviewed preliminary
geological surveys on the Property and will provide of this information
as well as all future information to the Parties on a continual basis.
Andhika will give Singkamas first priority/option for any future coal
mining opportunities for acquisition and/or for working together in
seeking other coal mining projects. In particular, Andhika must give
first priority to Singkamas to acquire any additional property which
are contiguous with the current property. In those instances where
these contiguous property and/or other property region are owned and/or
controlled by friends, families, and/or directors of other local PT.
Companies which are associated with Andhika, Andhika must give priority
to Singkamas to acquire such property, if available.
4.2 Singkamas will be responsible to provide and/or secure financing for
the Project, provide world-class technologies and
management/exploration teams and, if necessary, a strategic operator(s)
to develop the Property Singkamas will jointly assist the Project with
Andhika.
4.3 Singkamas may appoint a qualified Indonesian party to accept
the transfer of CoW and may at any time at its discretion
[SEAL]
cause or permit such party to transfer such property and licenses to
any third party based on prevailing regulations and subject to
Anugrah's continuing rights under the Agreement being respected by such
transferee.
5. TRANSFER OF LICENSES
5.1 Andhika will transfer 77.5% interest of coal minerals on the
Property. Furthermore, Andhika's principals and/or
<PAGE> 76
affiliates will not compete with Singkamas.
5.2 Payment For:
(a) Andhika agrees to sell 77.5% of its interest in the Property
as well as it's full and complete rights to the Government
Approvals to such qualified party as indicated by Singkamas
that may be appointed for the price of US One Million Dollars
(US$1,000,000).
(b) All payments hereunder shall be subject to continual
fulfillment by Andhika of its obligations under this
Agreement.
5.3 Payment Conditions:
(a) Singkamas agrees to make a down payment of US$200,000
after the signing of this Agreement. This payment,
however, is subject to legal verification that the
title to the Property is acceptable and without
encumbrances and that the government license issued to
Andhika is current and valid. Such payment to Andhika
will also be made after test results form the initial
investigation/exploration activity is completed and any
other legal verifications, which may be required in
respect of title to the Property and validity of
government licenses, is finalized.
5.4 Profit Sharing:
The Parties hereby agree that the Profit Sharing from the net profit
(total revenue minus all expenses, including taxes) to the Project
shall be as follows:
Singkamas 77.5%
Andhika 22.5%
[SEAL]
5.5 Reimbursement of Expenses:
Singkamas agrees to relinquish to or reimburse Andhika for the funds
which Andhika expended toward the Seriousness Bond which it paid to the
DGGM for blocking the property. These funds amount to a total of Rp.
714,211,000.-. Receipts for these expenses are referred in Exhibit IV.
Terms and Conditions for the reimbursement of these expenses are to be
determined by the Parties.
5.6 Exploration Program.
(a) Singkamas agrees to begin the Exploration Program on the
Property by February 1997 or sooner.
(b) Singkamas will dig numerous test pits as part of the
exploration program.
(c) Shallow drilling to the depth of 50-60 meters will also be
carried out over time second 90-day period.
<PAGE> 77
(d) Deep drilling depth of 200 meters will also be carried out
over the second 90-day period.
(e) Singkamas agrees to finance the Exploration Program for the
development and implementation of the Coal Mine Project. In
this regard, Singkamas agrees to spend a minimum of US$100,000
in Year 1; US$100,000 in Year 2; and US$100,000 in Year 3.
Accounting records for these expenditures will be kept by
Singkamas.
6. JURISDICTION
6.1 (a) Any dispute or controversies which may arise out of this
Agreement shall amicably settled by the Parties, but in
failure thereof, such disputes or controversies shall be
referred to the arbitration of the Rules of Badan Arbitrasi
Nasional Indonesia (BANI). The arbitration panel shall consist
of three (3) arbitrators, one (1) chosen by complainant, one
(1) chosen by the respondent, and a Chairman chosen by the
arbitrators named by the complainant and the respondent.
(b) The Parties agree that (1) the arbitration tribunal shall
decide the matter as expeditiously as possible. However, no
time limits shall be imposed, (ii) Section 631 of the R.V.
(Reglement opde Rechtsvordering).
<PAGE> 78
[SEAL]
shall apply, and that, accordingly, the arbitrators shall only
reach their decision by applying strict rules of law to the
facts and shall not purport to resolve any dispute exaequo et
bono, (iii) the arbitration shall be conducted in the English
language, in Jakarta, Indonesia, or such other place or places
in Indonesia, as the Parties to the arbitration may agree,
(iv) the Party in whose favor the arbitral award is rendered
shall be entitled to recover costs and expenses of
administration of the arbitration proceedings, and (v) the
arbitral award shall be issued in Indonesia.
(c) The parties expressly agree to waive Section 641 of the R.V.
and any other applicable laws permitting appeal to courts of
law or any other body so that, accordingly, there shall be no
appeal to any court of law or any other body from the decision
(or any interim decision) of the arbitrators and neither party
shall dispute nor question such decision before any judicial
authority in the Republic of Indonesia or elsewhere.
(d) Pending the submission to arbitration and thereafter until the
arbitration tribunal issues its decision, each party shall,
expect in the event of expiration, termination, or failure by
the other Party to obey or comply with a specific order or
decision of the arbitration tribunal, continue to perform all
of its obligations under this Agreement without prejudice to a
final adjustment in accordance with the said award.
6.2 This Agreement as to it's interpretation and application
shall be governed by the Laws of Indonesia.
6.3 The Parties hereby expressly agree to waive the provision of Article
1266 of the Indonesian Civil Code with respect to the need for a court
procurement to terminate this Agreement.
7. TERMS OF LIABILITY
7.1 This Agreement shall be in effect as of January 7, 1997 and shall be
valid until the purposes and objectives of the Project have been
fulfilled.
7.2 If for any reasons the transfer of the Property is not approved by the
Government Authorities within six (6) months after the date of this
Agreement, Singkamas shall have the option to terminate this Agreement
with on further liability hereunder.
<PAGE> 79
[SEAL]
8. OTHER MATTERS
Other matters not stipulated in this Agreement shall be further discussed and
decided later on through mutual discussions between the Parties on the basis of
this Agreement.
In Witness Whereof, the Parties agree that this Agreement is legal and binding,
and has caused their duly authorized representative to execute this Agreement on
the year and the first above stated.
PT. ANDHIKA MUTIARA ETAM SINGKAMAS AGUNG, LTD.
By [S] By [S]
--------------------------- ----------------------
Name: Adnan AS Name: William Chan
Title: President Director Title: President Director
Number : 20.191/1997/Leg.
- - -Seen for the signing for the signatures of:
- - -Mr. ADNAN ALAMSYAH SULAIMAN, Indonesian ---
Citizen, private person, residing ----------
Samarinda, Jalan Rawa Indah B3/No. 9, Rt. 52,
Rw. 08, holder of Identity Card Number: ----
03.1002/2714/00931/1995, temporarily being -
in Jakarta; --------------------------------
- - -Mr. WILLIE CHAN HUA BENG, Singapore Citizen,
private person, holder of Passport Number:
S 1852289-F, temporarily being Jakarta; -
both are known to me, BUNTARIO TIGRIS -----
DARMANA, NG.SH.CN. by virtue of decision----
Letter from the Minister of Justice of the
Republic of Indonesia, dated on the
thirteenth day of April one thousand nine hundred
ninety-five (13-4-1995) number: C-59.HT.
03.07-Th. 1995, substitute of RACHMAT SANTOSO,
SH. Notary in Jakarta.--------------------------
Jakarta, 7 January 1997
Substitute Notary in Jakarta.
[SEAL]
(BUNTARIO TIGRIS DARMANA, NG.SH.CN.)
<PAGE> 80
LIST OF EXHIBITS
EXHIBIT I DESCRIPTION OF THE PROPERTY
EXHIBIT II GOVERNMENT FILINGS
EXHIBIT III SHAREHOLDER'S MINUTES
EXHIBIT IV RECEIPTS
<PAGE> 81
EXHIBIT I
DESCRIPTION OF THE PROPERTY
<PAGE> 82
[map]
<PAGE> 83
[TRANSLATION NOT CURRENTLY AVAILABLE, BUT WILL BE PROVIDED BY AMENDMENT.]
[SEAL]
Lampiran I : KEPUTUSAN DIREKTUR JENDERAL PERTAMBANGAN UMUM
Nomor :
Tanggal :
LAMPIRAN DAFTAR KOORDINAT
Nama Perusahaan : PT. ANDHIKA MUTIARA ETAM
Lokasi
- - - Propinsi : KALIMANTAN TIMUR
- - - Kabupaten : KUTAI
- - - Kecamatan : -
- - - Kode Wilayah : JLB007
Luas : 71.420 Ha
<TABLE>
<CAPTION>
==================================================================
No. Garis Bujur (BT) Garis Lintang
Ti -----------------------------------------------------------
tik O ' " O ' " LU/LS
------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
1 117 21 30.0 1 15 0.0 LU
2 117 21 30.0 1 30 0.0 LU
3 117 23 0.0 1 30 0.0 LU
4 117 23 0.0 1 33 0.0 LU
5 117 24 0.0 1 33 0.0 LU
6 117 24 0.0 1 35 0.0 LU
7 117 25 0.0 1 35 0.0 LU
8 117 25 0.0 1 38 30.0 LU
9 117 30 0.0 1 38 30.0 LU
10 117 30 0.0 1 26 0.0 LU
11 117 35 0.0 1 26 0.0 LU
12 117 35 0.0 1 20 0.0 LU
13 117 30 0.0 1 20 0.0 LU
14 117 30 0.0 1 15 0.0 LU
==================================================================
</TABLE>
Direktur Jenderal Pertambangan Umum
Kuntoro Mangkusubroto
<PAGE> 84
EXHIBIT II
GOVERNMENT FILINGS
<PAGE> 85
[TRANSLATION NOT CURRENTLY AVAILABLE, BUT WILL BE PROVIDED BY AMENDMENT.]
[SEAL]
T A N D A T E R I M A
Nomor: 402/SDPH/1996
Perusahaan : ANDHIKA MUTIARA ETAM, PT
Alamat di Indonesia : Komp. Pinang Babaris Blok A/47-48
Samarinda
Telp. 0541-41974
Alamat di Luar Negeri
Tgl/Jam Terima Aplikasi : 09/07/1996, 10.00
Bahan Galian : Batubara
Jenis Aplikasi : Kontrak Karya Batubara
Kode Wilayah : 96JLB007
Propinsi : Kalimanta Timur
Lokasi : Kab.Kutai
Luas Wilayah : 71.420.00 Ha
Lampiran Aplikasi:
<TABLE>
<CAPTION>
- - ---------------------------------------------------------------------
No. Keterangan Persyaratan
- - ---------------------------------------------------------------------
<S> <C> <C>
1 Peta dari UPIPWP Ada
- - ---------------------------------------------------------------------
2 Tanda bukti penyetoran jaminan kesungguhan Ada
- - ---------------------------------------------------------------------
3 Tanda terima SPT tahun terakhir (PMDN) Ada
- - ---------------------------------------------------------------------
4 Lap.keuangan perusahaan PMA dan PMDN tiga tahun Ada
terakhir yang telah diaudit
- - ---------------------------------------------------------------------
5 Kesepakatan bersama (MOU) jika> 1 pemohon Tidak ada
- - ---------------------------------------------------------------------
6 Laporan Tahunan Perusahaan (PMA dan PMDN) Ada
- - ---------------------------------------------------------------------
</TABLE>
Jakarta, 09/07/1996
Kepala Bagian Perundang-undangan
/s/
YUSMID AP, SH
100002520
[SEAL]
<PAGE> 86
EXHIBIT III
SHAREHOLDER'S MINUTES
<PAGE> 87
[LOGO] [SEAL]
MINUTES OF GENERAL MEETING OF FOUNDERS
OF
PT ANDHIKA MUTIARA ETAM
On this day fifteenth December one thousand nine hundred ninety six
(15-12-1996), a General Meeting of Founders ("Meeting") of PT. ANDIKA MUTIARA
ETAM ("the Company") was held at Plaza Exim, 24th Floor, Jl.Jendral Gatot
Soebroto Kav.36-38, Jakarta 12910.
The Company was established by Deed No. 64 dated 19 June 1996 made by
Haji Gunawan,SH,Notary in Samarinda, such deed has not been approved yet by the
Minister of Justice of the Republic of Indonesia (here in after reforted to as
the "Articles of Association")
Present in this Meeting:
1. Adnan Alamsyah Sulaiman, as the holder of 160 shares of the Company;
2. Armansyah Sulaiman, as the holder of 80 shares of the Company;
3. Sri Aslinda Sulaiman, as the holder of 160 shares of the Company;
4. Drs. Ardiansyah Sulaiman, as the holder of 160 shares of the Company;
5. Anwar Heriansyan Sulaiman, as the holder of 160 shares of the Company;
6. Sulaiman, as the holder of 80 shares of the Company.
That in this Meeting there were represented 800 shares, which represent all of
the subscribed and issued shares in the Company so that based on Article 20 of
Article of Association of the Company, this meeting is duly convened and has the
power to make valid decision with respect to all matters which are to be
discussed even though there was no written call of the Meeting.
The Chairman further explained to the Meeting that the agenda of the
Meeting is the transfer of the property and interest of the Company in Kontrak
Karya Batu Bara KW APB042 (KKB) and any government licenses with regard to such
KP to Singkamas Agung Ltd. or any other party appointed by Singkamas Agung Ltd.
In respect to the above mentioned Agenda, the Chairman after giving a
complete explanation, subsequently proposed to the Meeting and the Meeting after
due discussion, unanimously voted to approve and therefore decides to declare
the transfer of the property and interest in Kontrak Karya Batu Bara KW 96JLB007
and any government licenses with regard to such KKB to Singkamas Agung Ltd. or
any other party appointed by Singkamas Agung Ltd. was approved by founders of
the Company.
<PAGE> 88
[SEAL]
The meeting hereby authorizes the Board of Directors of the Company
with the right of substitution, to appear before a Notary to state the
resolutions resolved hereunder in notarial deed and to appear wherever
necessary, to give information, to make, to cause to be made and signed, all
necessary letters/documents, and further to perform all actions deemed proper
and useful for the completion of the above mentioned matters.
Since no other matters to be discussed in this Meeting is closed by the
Chairman at 16.00 West Indonesian Time.
Chairman Shareholders
[SEAL]
/s/ /s/
- - ----------------------- -------------------
Adnan Alamsyah Sulaiman Armansyah Sulaiman
Shareholders Shareholders
/s/ /s/
- - ----------------------- ------------------------
Sri Aslinda Sulaiman Drs. Ardiansyah Sulaiman
Shareholders Shareholders
/s/ /s/
- - ------------------------ ------------------------
Anwar Heriansyah Sulaiman Sulaiman
<PAGE> 89
EXHIBIT IV
RECEIPTS
<PAGE> 90
[SEAL]
[ILLEGIBLE COPY]
<PAGE> 91
[TRANSLATION NOT CURRENTLY AVAILABLE, BUT WILL BE PROVIDED BY AMENDMENT.]
[SEAL]
Jakarta, 3 Juli 1996
Nomor : 1694 /861/DJP/1996
Lampiran :
Hal : Penyetoran uang Jaminan Kesungguhan
Yang terhormat
PT. ANDHIKA MUTIARA ETAM
Komp. Pinang Babaris Blok A/47 - 48
Samarinda Kaltim
Berdasarkan Keputusan Menteri Pertambangan dan Energi Nomor
135.K/201/M.PE/1996 tanggal 20 Maret 1996 dan Keputusan Direktur Jenderal
Pertambangan Umum Nomor 154.K/27/DDJP/1996 tanggal 3 Mei 1996, maka dalam rangka
memenuhi persyaratan pengajuan permohonan Kontrak Karya Batubara, kepada Saudara
diminta menyetorkan/transfer uang sebesar Rp. 714.200.000,- (tujuh ratus empat
belas juta dua ratus ribu rupiah atau AS$
pada rekening Direktur Jenderal Pertambangan Umum Nomor 700.087.06025.2.01.5
(untuk rupiah) atau Nomor 3081.411.0180.4 (untuk dollar Amerika Serikat) pada
PT. Bank Dagang Negara (Persero) Cabang Jakarta Wisma Baja Jalan Jenderal Gatot
Subroto Kav. 54 Jakarta 12950 dan didepositokan atas nama Direktur Jenderal
Pertambangan Umum qq perusahaan Saudara.
Bukti penyetoran/transfer tersebut dilampirkan pada Daftar Isian
Permohonan Kontrak Karya Batubara yang Saudara Ajukan.
Apabila sampai dengan tanggal 9 Juli 1996, Saudara tidak melaksanakan
penyetoran/transfer dimaksud, maka wilayah yang telah dicadangkan dinyatakan
bebas dan terbuka kembali untuk umum.
Demikian untuk Saudara laksanakan.
DIREKTUR JENDERAL PERTAMBANGAN UMUM
SEKRETARIS DIREKTORAT JENDERAL PERTAMBANGAN UMUM,
[SEAL]
/s/
NASRI YUNUS ANIS, SH
NIP. 100001656
Tembusan:
1. Kepala Bagian Perundang-undangan, Sekretariat Direktorat Jenderal
Pertambangang Umum
2. Direksi PT. Bank Dagang Negara (Persero) Cabang Jakarta Wisma Baja.
KD. 96 JLB007
<PAGE> 92
DEVELOPMENT AGREEMENT
COAL MINING PROJECTS IN EAST KALIMANTAN
[SEAL]
This Development Agreement (Agreement) is made and entered into on this seventh
day of January, 1997 by and between:
PT. Andhika Mutiara Lestari, a limited liability company established and validly
existing under Indonesia law, and having its address at Jl. Langsat No.59 Komp,
Samarinda - Indonesia (hereinafter referred to as "Andhika"), and is represented
in this Agreement by its' President Direcotr, Mr. Adnan AS; and
Singkamas Agung Ltd., a Bahamas Corporation having its' registered offices in
the Bahamas and its representative offices in Singapore (hereinafter referred to
as "Singkamas"), and is represented in this Agreement by its' President
Director, Mr. William Chan.
(Andhika and Singkamas are hereinafter referred to collectively as "The
Parties").
WITNESSETH
Whereas, the Government of Indonesia acting through its' Ministry of Mines and
Energy and the Directorate General of General Mining (hereinafter referred to as
the "DGGM") wishes to expand on its enhanced exploration and exploitation for
coal and other natural resources during the next Sixth Development Plan (known
as Repelita VI) and beyond, and encourages the private sector to participate in
such explorations, development, exploitation and production; and
Whereas Singkamas is actively seeking to acquire coal mining concessions and to
implement coal mining activities in East Kalimantan, Indonesia (hereinafter
referred to as the "Project"); and
Whereas Andhika has successfully reserved, or "blocked", one (1) potential coal
mining property in the coal mining district of East Kalimantan. The geographical
location of such property is described in Exhibit I. Andhika can successfully
demonstrate that it has officially blocked this area of land at the DGGM through
its' official and complete filings and payments to the DGGM for this area. These
official
<PAGE> 93
[SEAL]
documents are attached in Exhibit II. Currently, Andhika controls the rights to
this property and is in the process of obtaining the government approvals and or
mandates (hereinafter referred to as the "Government License"), which are to be
issued in the form of Contracts of Work (hereinafter referred to as a "CoWs"),
for the development and exploitation of the coal mining property. Andhika also
recognizes the importance of obtaining any other government licenses associated
with the exploitation of coal, including the license for the refinery and
production of coal as well as the transportation and sale of coal; Andhika will
use its' expert abilities and efforts to obtain these additional licenses from
the Government in order to facilitate the development, implementation, and
success of the Project; and
Whereas both Parties agree to use their best efforts to complete the sale and
acquisition of the Property (hereinafter referred to as the "Transaction"),
which includes the rights to the government licenses for the exploration and
exploitation of coal on the Property. The Parties also agree to jointly
cooperate to successfully obtain any other government licenses which will be
necessary; and
Whereas the Coal Mining Property (hereinafter referred to as the "Property") is
located in the coal mining district of East Kalimantan, Indonesia and,
potentially, has substantial deposits of coal and other natural resources. The
property encompasses a combined total of approximately 109,900 hectares of land.
A geographical description of the Property is provided in Exhibit I which is
attached to this Agreement. The Property is located in a coal mineralization
zone and, through official filings and monetary payments made to the DGGM (which
includes both filing and annual fees as well as seriousness bonds), Andhika has
secured the rights to the Property and is in the process of obtaining the
government licenses for the general survey and exploration of coal on the
Property as well as the CoWs to exploit coal on the Property. These documents
are shown in Exhibit II which is attached to this Agreement.
DESCRIPTION OF THE PROPERTY: 109,900 HECTARES
The Property consists of approximately 109,900 hectares of land. For this block
of property, Andhika has properly filed, paid for, and obtained the rights to
this area. Andhika is also currently in the process of obtaining the CoWs to
explore and exploit coal on the property. See Exhibit II.
For purposes of this Transaction, Mr. Adnan AS, a President Director of PT
Andhika Mutiara Etam, has been granted the complete and/or official
authorization, through a General Shareholder's Meeting (subject to provision in
the Articles of Association), to sell 77.5% of Andhika's interest in the
Property, including the complete transfer of the government rights (when
obtained) to explore and exploit for coal on the Property. These Shareholder's
Minutes are referenced in Exhibit III which is attached to this Agreement.
Although Andhika will actively seek to obtain the government licenses for
<PAGE> 94
[SEAL]
the commercial exploitation of coal (including the licenses for the refinery
production, transportation, and sale of coal), Andhika recognizes that these
government licenses will also be transferred to Singkamas or to some third party
which is appointed by Singkamas.
Andhika will use its' expert abilities and efforts for obtaining the government
licenses from the DGGM. The purposes of obtaining all of the necessary licenses
is to make it feasible for Singkamas to effectively and efficiently mine the
Property and to make them into a world-class profitable operation.
Whereas Singkamas has the ability to provide and/or secure financing to acquire
77.5% interest in the Coal Mining Property and the related government licenses
from Andhika as well as the ability to develop the Property into a world-class
mining operation.
Now therefore, the Parties hereto agree as follows:
1. COOPERATION
In accordance with the Government approvals which has already been granted to
Andhika, the parties agree as follows:
1.1. To submit additional application(s), as necessary, to the DGGM for the
licenses and/or CoWs for the exploration and exploitation of coal on
the Property.
1.2. To complete the acquisition of the Property.
1.3. To support, develop, and complete the mining operations.
2. EXCLUSIVITY
Except as otherwise provided for in this Agreement, the Parties warrant that
they shall cooperate solely and exclusively with each other in connection with
this Coal Mining Project and that none of them shall enter into any agreement
with any other firm or group of firms with respect to any matter related to this
Project without the prior written consent of the other Party and to keep this
information strictly confidential. Further, Andhika will grant Singkamas a first
rights of refusal with respect to any coal mining property which it may control,
influence the sale of, or be able to recommend to Singkamas.
The Parties also warrant that such exclusivity will be respected by those
persons or firms which they may exercise control or with their affiliate in any
manner.
<PAGE> 95
[SEAL]
3. SPONSORSHIP
Andhika shall act as the main sponsor of this Project. In this regard, Andhika
has the complete and proper approvals (which are subject to legal verification)
to transfer 77.5% interest in the Property, which includes the full and complete
rights to any Government Licenses which Andhika will receive for the exploration
and exploitation of coal on the Property. All geological and other significant
information will be made available to the parties on a continual basis.
Furthermore, Andhika will obtain any other necessary and appropriate government
licenses associated with the refinery and production of coal as well as the
transportation and sale of coal. Similarly, these licenses will also be
transferred to Singkamas or its' designee.
4. INITIAL RESPONSIBILITIES
The Parties agree that their responsibilities shall be as follows;
4.1 Andhika will secure the proper approvals to sell its' rights to the
Property as well as its' rights to the Government Licenses.
Andhika will assist with the development of the Project in conjunction
with the Parties as needed. In particular, Andhika will take all steps
necessary or deemed advisable by Singkamas to secure the CoW for the
exploitation of coal on the Property. Andhika has reviewed preliminary
geological surveys on the Property and will provide all of this
information as well as all future information to the Parties on a
continual basis. Andhika will give Singkamas first priority/option for
any future coal mining opportunities for acquisition and/or for working
together in seeking other coal mining projects. In particular, Andhika
must give first priority to Singkamas to acquire any additional
property which are contiguous with the current property. In those
instances where these contiguous property and/or other property region
are owned and/or controlled by friends, families, and/or directors of
other local PT. Companies which are associated with Andhika, Andhika
must give priority to Singkamas to acquire such property, if available.
4.2 Singkamas will be responsible to provide and/or secure financing for
the Project, provide world-class technologies and
management/exploration teams and, if necessary, a strategic operator(s)
to develop the Property Singkamas will jointly assist the Project with
Andhika.
4.3 Singkamas may appoint a qualified Indonesian party to accept the
transfer of CoW and may at any time at its discretion cause or permit
such party to transfer such property and licenses to any third party
based on prevailing regulations and subject to Anugrah's continuing
rights under the Agreement being respected by such transferee.
<PAGE> 96
[SEAL]
5. TRANSFER OF LICENSES
5.1 Andhika will transfer 77.5% interest of coal minerals on the
Property. Furthermore, Andhika's principals and/or affiliates
will not complete with Singkamas.
<PAGE> 97
5.2 Payment For:
(a) Andhika agrees to sell 77.5% if its interest in the Property
as well as its' full and complete rights to the Government
Approvals to such qualified party as indicated by Singkamas
that may be appointed for the price of US One Million Dollars
(US$1,000,000).
(b) All payments hereunder shall be subject to continual
fulfillment by Andhika of its obligations under this
Agreement.
5.3 Payment Conditions:
(a) Singkamas agrees to make a down payment of US$200,000 after
the signing of this Agreement. This payment, however, is
subject to legal verification that the title to the Property
is acceptable and without encumbrances and that the
government license issued to Andhika is current and valid.
Such payment will be made to Andhika once the test results
from the initial investigation/exploration activity are
completed and any other legal verifications, which may be
required in respect of title to the Property and validity of
government licenses, is finalized.
(b) The final payment of US1,500,000 will be immediately paid to
Andhika upon the coal mines being put into the production
stage and are generating positive revenues. For this to occur,
however, Andhika must first secure the complete and proper
CoW.
Andhika recognize that once it secures CoW for the benefit of
the Parties and, moreover, the benefit of the Project, Andhika
will transfer the full and complete rights of CoW to Singkamas
or the entity appointed by Singkamas.
5.4 Profit Sharing
The Parties hereby agree that the Profit Sharing from the net profit
(total revenue minus all expenses including taxes) to the project shall
be as follows:
<PAGE> 98
[SEAL]
Singkamas 77.5%
Andhika 22.5%
5.5 Reimbursement of Expenses
Singkamas agrees to relinquish to or reimburse Andhika for the funds
which Andhika expended towards the Seriousness Bond which it paid to
the DGGM for blocking the property. These funds amount to a total of
Rp. 1,198,000,000.-. Receipts for these expenses are referred in
Exhibit IV. Terms and Conditions for the reimbursement of these
expenses are to be determined by the Parties.
5.6 Exploration Program
(a) Singkamas agrees to begin the Exploration Program on the
Property by February 1997 or sooner.
(b) Singkamas will dig numerous test pits as part of the
exploration program.
(c) Shallow drilling to the depth of 50-60 meters will also be
carried out over time second 90-day period.
(d) Deep drilling to depth of 200 meters will also be carried
out over the second 90-day period.
(e) Singkamas agrees to finance the Exploration Program for the
development and implementation of the Coal Mine Project. In
this regard, Singkamas agrees to spend a minimum of US$100,000
in year 1, US$100,000 in Year 2; and US$100,000 in Year 3.
Accounting record for these expenditures will be kept by
Singkamas.
6. JURISDICTION
6.1 (a) Any dispute or controversies which may arise out of this
Agreement shall be amicably settled by the Parties, but in
failure thereof, such disputes or controversies shall be
referred to the arbitration of the Rules of Badan Arbitrasi
Nasional Indonesia (BANI). The arbitration panel shall
consist of three (3) arbitrators, one (1) chosen by the
complainant, one (1) chosen by the respondent and a Chairman
chosen by the arbitrators named by the complainant and the
respondent.
(b) The Parties expressly agree that (1) the arbitration shall
decide the matter as expeditiously as possible, however, no
time limits shall be
<PAGE> 99
[SEAL]
imposed, (ii) Section 631 of the R.V. (Reglement opde Rechtsvordering)
shall apply, and that accordingly the arbitrators shall only reach
their decision by applying strict rules of law to the facts and shall
not purport to resolve any dispute exaequo et bono, (iii) the
arbitration shall be conducted the English language, in Jakarta,
Indonesia, or such other place or places in Indonesia, as the parties
to the arbitration may agree, (vi) the Party in whose favor the
arbitral award is rendered shall be entitled to recover costs and
expenses of the arbitration including but not limited to the cost and
expense of administration of the arbitration proceedings, and (v) the
arbitral award shall be issued in Indonesia.
(c) The Parties expressly agree to waive section 641 of the R.V.
and any other applicable laws permitting appeal to courts of
law or any other body so that accordingly there shall be no
appeal to any court of law or any other body from the
decision (or any interim decision) of the arbitrators and
neither party shall dispute nor question such decision
before any judicial authority in the Republic of Indonesia
of elsewhere.
(d) Pending the submission to arbitration and thereafter until
the arbitration tribunal issues its decision, each Party
shall, expect in the event of expiration, termination or
failure by the other Party to obey or comply with a specific
order or decision of the arbitration tribunal, continue to
perform all of its obligations under this Agreement without
prejudice to a final adjustment in accordance with the said
award.
6.2 This Agreement as to its' interpretation and application shall be
governed by the Laws of Indonesia.
6.3 The Parties hereby expressly agree to waive the provision of Article
1266 of the Indonesian Civil Code with respect to the need for a court
pronouncement to terminate this Agreement.
7. TERM OF VALIDITY
7.1 This agreement shall be in effect as of January 7th, 1997, and shall be
valid until the purposes and objectives of the Project have been
fulfilled.
7.2 If for any reasons the transfer of the Property is not approved by the
Government Authorities within six (6) months after the date of this
Agreement, Singkamas shall have the option to terminate this Agreement
with no further liability hereunder.
<PAGE> 100
[SEAL]
8. OTHER MATTERS
Other matters not stipulated in this Agreement shall be further discussed and
decided later on through mutual discussion between the Parties on the basis of
this Agreement.
In Witness Whereof, the Parties agree that this Agreement is legal and binding
and have caused their duly authorized representatives to execute this Agreement
on the year and the first above stated.
PT. ANDHIKA MUTIARA LESTARI SINGKAMAS AGUNG LTD.
By /s/ By /s/
Name : Adnan AS Name : William Chan
Title : President Director Title : President Director
Number : 20.191/1997/Leg.
- - -Seen for the signing of the signatures of:
- - -Mr. ADNAN ALAMSYAH SULAIMAN, Indonesian---
Citizen, private person, residing in ------
Samarinda, Jalan Rawa Indah B3/No.9, Rt. 52,
Rw. 08, holder of Identity Card Number: ----
03.1002/2714/00931/1995, temporarily being-
in Jakarta;--------------------------------
- - -Mr. WILLIE CHAN HUA BENG, Singapore Citizen,
private person, holder of Passport Number:
S 1852289-F, temporarily being in Jakarta,-
both are known to me, BUNTARIO TIGRIS------
DARMAWA,NG.SH.CN. by virtue of decision----
Letter from the Minister of Justice of the-
Republic of Indonesia dated on the thirteenth
day of April one thousand nine hundred and-
ninety five (13-4-1995) number : C-59.HT.
03.07-Th.1995, substitute of RACHMAT SANTOSO,
SH. Notary in Jakarta.----------------------
Jakarta, 7th January 1997
Substitute Notary in Jakarta
[SEAL]
/s/
(BUNTARIO TIGRIS DARMAWA, NG.SH.CN.)
<PAGE> 101
LIST OF EXHIBITS
EXHIBIT I DESCRIPTION OF THE PROPERTY
EXHIBIT II GOVERNMENT FILINGS
EXHIBIT III SHAREHOLDER'S MINUTES
EXHIBIT IV RECEIPTS
<PAGE> 102
EXHIBIT I
DESCRIPTION OF THE PROPERTY
<PAGE> 103
[MAP]
<PAGE> 104
[TRANSLATION NOT CURRENTLY AVAILABLE, BUT WILL BE PROVIDED BY AMENDMENT.]
[SEAL]
Lampiran I : Keputusan Direktur Jenderal Pertambangan Umum
Nomor :
Tanggal :
LAMPIRAN DAFTAR KOORDINAT
Nama Perusahaan : PT. ANDHIKA MUTIARA LESTARI
Lokasi
Propinsi : KALIMANTAN TIMUR
Kabupaten : KUTAI
Kecamatan : SANGKULIRANG
Kode Wilayah : AP0585
Luas : 109.900 Ha
<TABLE>
<CAPTION>
==============================================================
No. Garis Bujur (BT) Garis Lintang
Ti- -------------------------------------------------------
tik o ' " o ' " LU/LS
--------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
1 117 48 0.0 1 22 0.0 LU
2 117 56 0.0 1 22 0.0 LU
3 117 56 0.0 1 24 0.0 LU
4 118 14 0.0 1 24 0.0 LU
5 118 14 0.0 1 3 0.0 LU
6 118 3 0.0 1 5 0.0 LU
7 118 3 0.0 1 17 0.0 LU
8 117 48 0.0 1 17 0.0 LU
==============================================================
</TABLE>
Direktur Jenderal Pertambangan Umum
Kuntoro Mangkusubroto
<PAGE> 105
EXHIBIT II
GOVERNMENT FILINGS
<PAGE> 106
[TRANSLATION NOT CURRENTLY AVAILABLE, BUT WILL BE PROVIDED BY AMENDMENT.]
[LOGO] [SEAL]
10 Mei 1996
Nomor : 1976/29/M.DJP/1996
Sifat :
Lampiran:
Perihal : Persetujuan Prinsip Aplikasi Kontrak Karya
Batubara Atas Nama PT Andhika Mutiara
Lestari
Yang terhormat
Direksi PT Andhika Mutiara Lestari
Komplek Pinang Babaris Blok A No. 47-48
Samarinda, Kalimantan Timur
Menunjuk Surat permohonan Saudara tanggal 27 Maret 1996 dan
memperhatikan surat Direktur Jenderal Pertambangan Umum nomor 938/29/DJP/1996
tanggal 19 April 1996 perihal permohonan persetujuan prinsip aplikasi Kontrak
Karya Batubara (KKB), dengan ini kami beritahukan bahwa pada prinsipnya kami
dapat menyetujui aplikasi PT Andhika Mutiara Lestari untuk mengusahakan bahan
galian batubara di Kecamatan Sangkuliran, Kabupaten Kutai, Propinsi Kalimantan
Timur seluas 109.900 ha, sesuai dengan pencadangan wilayah dari Unit Pelayana
Informasi dan Pencadangan Wilayah Pertambangan (UPIPWP) Direktorat Jenderal
Pertambangan Umum tanggal 25 Maret 1996.
Selama pemrosesan permohonan KKB tersebut, Saudara dapt segera
mempelajari draf KKB dan melakukan perundingan dengan Tim Perunding Batubara.
Apabila dikehendaki Saudara dapat meneliti wilayah yang dimohon sebelum KKB
ditandatangani. Untuk itu Saudara dapat mengajukan permohonan Surat Izin
Penyelidikan Pendahuluan (SIPP) berdasarkan Keputusan Menteri Pertambangan dan
Energi nomor 2202.K/201/M.PE/1994 tanggal 18 November 1994.
Kami tekankan lagi bahwa kerusakan lingkungan yang diakibatkan oleh
kegiatan penambang, adalah tanggung jawab penambang yang bersangkutan.
Atas perhatian Saudara, kami ucapkan terima kasih.
Menteri Pertambangan dan Energi
[SEAL]
/s/
I.B. Sudjana
Tembusan:
1. Bapak Menteri Negara Penggerak Dana Investasi/Ketua BKPM
2. Sekretaris Jenderal Departemen Pertambangan dan Energi
3. Direktur Jenderal Pertambangan Umum
4. Gubernur Kepala Daerah Tingkat I Propinsi Kalimantan Timur
5. Direktur Utama PT Tambang Batubara Bukit Asam (Persero)
6. Direktur Batubara, Ditjen Pertambangan Umum
7. Direktur Teknik Pertambangan Umum, Ditjen Pertambangan Umum
8. Kepala Kanwil Dep. Pertambangan dan Energi Prop. Kalimantan Timur
<PAGE> 107
[TRANSLATION NOT CURRENTLY AVAILABLE, BUT WILL BE PROVIDED BY AMENDMENT.]
[SEAL]
T A N D A T E R I M A
Nomor: 188/SDPH/1996
A. Permohonan (aplikasi) dari : PT. Andhika Mutiara Lestari
Tanggal : 27 Maret 1996
Alamat : Komp. Pinang Babaris Blok A
Nomor 47-48
Samarinda Kaltim
Telp. 0541-41974
Diterima hari/tanggal/Jam : Rabu /27 Maret 1996/15.00
Perihal : Permohonan Kontrak Karya
Batubara di daerah
Propinsi Kalimantan Timur
Kabupaten Kutai
Luas 109.900 Ha
Kode Wilayah : AP 0585
B. Lampiran - lampiran :
1. Peta wilayah (asli) dari Unit Pelayanan Informasi dan
Pencadangan Wilayah Pertambangan (UPIPWP)..............: ada
2. Tanda Bukti penyetoran jaminan kesungguhan dari Bank
yang ditunjuk..........................................: ada
3. Tanda terima SPT tahun terakhir........................: ada
4. Laporan Keuangan 3 (tiga) tahun terakhir yang telah
diaudit oleh Akuntan Publik:
- Perusahaan Asing.....................................: ---
- Perusahaan Indonesia (Perusahaan Pendukung)..........: ada
5. Kesepakatan bersama (MOU) jika pemohon diajukan lebih
dari 2 pemohon.........................................: ---
6. Laporan tahunan perusahaan.............................: ada
Permohonan tersebut telah dilampiri persyaratan sesuai ketentuan yang berlaku
untuk diteruskan ke Direktur Batubara.
Jakarta, 27 Maret 1996
Kepala Bagian Perundang-Undangan
[SEAL]
/s/
Yusmid AP, SH.
NIP. 100002520
Tembusan:
- - - Unit Pelayanan Informasi Pencadangan Wilayah Pertambangan (UPIPWP)
<PAGE> 108
[SEAL]
[ILLEGIBLE COPY]
<PAGE> 109
[TRANSLATION NOT CURRENTLY AVAILABLE, BUT WILL BE PROVIDED BY AMENDMENT.]
[SEAL]
Nomor :
Lampiran :
Hal : Penyetoran uang Jaminan Kesungguhan
Yang terhormat
PT. Andhika Mutiara Lestari
Komp. Pinang Babaris Blok A/47-
48 Samarinda Kaltim
Berdasarkan Edaran kami No.02/E/80/DJP/1996 tanggal 16 Januari
1996 yang merupakan penyempurnaan dari Edaran No.01/E/80/DJP/1996
tanggal 8 Januari 1996, maka dalam rangka memenuhi persyaratan
pengajuan permohonan Kontrak Karya Batubara*, kepada Saudara diminta
menyetorkan/transfer uang sebesar Rp 1.198.000.000 (Satu millar
seratus sembilan puluh delapan Juta Rupiah) atau AS
$...........................................) pada rekening Direktur
Jenderal Pertambangan Umum No.700.087.06025.2.01.5 (untuk rupiah) atau
Nomor 3081.411.0180.4 (untuk dollar Amerika Serikat) pada PT. Bank
Dagang Negara (Persero) Cabang Jakarta Wisma Baja Jalan Jenderal Gatot
Subroto Kav. 54 Jakarta 12950 dan didepositokan atas nama Direktur
Jenderal Pertambangan Umum qq perusahaan Saudara.
Bukti penyetoran/transfer tersebut dilampirkan pada Daftar Isian
Permohonan Kontrak Karya Batubara yang Saudara ajukan.
Apabila sampai dengan tanggal 29 Maret 1996, Saudara tidak melaksanakan
penyetoran/transfer dimaksud, maka wilayah yang telah dicadangkan dinyatakan
bebas dan terbuka kembali untuk umum.
Demikian untuk Saudara laksanakan.
DIREKTUR JENDERAL PERTAMBANGAN UMUM
SEKRETARIS DIREKTORAT JENDERAL PERTAMBANGAN UMUM,
[SEAL]
/s/
NASRI YUNUS ANIS, SH
NIP. 100001656
Tembusan:
1. Kepala Bagian Perundang-undangan, SDJPU
2. Direksi PT. Bank Dagang Negara (Persero) Cabang Jakarta Wisma Baja.
<PAGE> 110
EXHIBIT III
SHAREHOLDER'S MINUTES
<PAGE> 111
[LOGO]
[SEAL]
MINUTES OF GENERAL MEETING OF FOUNDERS
OF
PT ANDHIKA MUTIARA LESTARI
On this day fifteenth December one thousand nine hundred ninety six
(15-12-1996), a General Meeting of Founders ("Meeting") of PT. ANDIKA MUTIARA
LESTARI ("the Company") was held at Plaza Exim, 24th Floor, Jl.Jendral Gatot
Soebroto Kav.36-38, Jakarta 12910.
The Company was established by Deed No. 47 dated 20 Oktober 1995 made
by Haji Hardjo Gunawan,SH,Notary in Samarinda, such deed has not been approved
yet by the Minister of Justice of the Republic of Indonesia (here in after
reforted to as the "Articles of Association")
Present in this Meeting:
1. Adnan Alamsyah Sulaiman, as the holder of 700 shares of the Company;
2. Sulaiman, as the holder of 700 shares of the Company;
3. Sri Aslinda Sulaiman, as the holder of 700 shares of the Company;
4. Drs. Ardiansyah Sulaiman, as the holder of 700 shares of the Company;
5. Anwar Heriansyan Sulaiman, as the holder of 525 shares of the Company;
That in this Meeting there were represented 3500 shares, which represent all of
the subscribed and issued shares in the Company so that based on Article 20 of
Article of Association of the Company, this meeting is duly convened and has the
power to make valid decision with respect to all matters which are to be
discussed even though there was no written call of the Meeting.
The Chairman further explained to the Meeting that the agenda of the
Meeting is the transfer of the property and interest of the Company in Kontrak
Karya Batu Bara KW APB042 (KKB) and any government licenses with regard to such
KP to Singkamas Agung Ltd. or any other party appointed by Singkamas Agung Ltd.
In respect to the above mentioned Agenda, the Chairman after giving a
complete explanation, subsequently proposed to the Meeting and the Meeting after
due discussion, unanimously voted to approve and therefore decides to declare
the transfer of the property and interest in Kontrak Karya Batu Bara KW AP0585
and any government licenses with regard to such KKB to Singkamas Agung Ltd. or
any other party appointed by Singkamas Agung Ltd. was approved by founders of
the Company.
<PAGE> 112
[LOGO]
[SEAL]
The meeting hereby authorizes the Board of Directors of the Company
with the right of substitution, to appear before a Notary to state the
resolutions resolved hereunder in notarial deed and to appear wherever
necessary, to give information, to make, to cause to be made and signed, all
necessary letters/documents, and further to perform all actions deemed proper
and useful for the completion of the above mentioned matters.
Since no other matters to be discussed in this Meeting is closed by the
Chairman at 16.00 West Indonesian Time.
Chairman Shareholders
/s/ /s/
- - ----------------------- ------------------------
Adnan Alamsyah Sulaiman Sulaiman
Shareholders Shareholders
/s/ /s/
- - ----------------------- ------------------------
Sri Aslinda Sulaiman Drs. Ardiansyah Sulaiman
Shareholders
/s/
- - -------------------------
Anwar Heriansyah Sulaiman
<PAGE> 113
[TRANSLATION NOT CURRENTLY AVAILABLE, BUT WILL BE PROVIDED BY AMENDMENT.]
[LOGO]
[SEAL]
Samarinda, 7 Januari 1997
Yang bertandatangan dibawah ini:
N a m a : ADNAN AS
Alamat : Jl. Rawa Indah B-3/No.9 Samarinda
Jabatan : Pendiri PT. ANDHIKA MUTIARA LESTARI
Dengan ini menyetakan bahwa, Bapak Abdullah Juffrie telah meninggal
dunia. Pendiri PT. ANDHIKA MUTIARA LESTARI menyatakan sepenuhnya ahli waris dari
Bapak Abdullah Jueffrie telah setuju secara penuh dilaksanakan pengalihan
Kontark Karya Batu Bara, kode wilayah : AP0585 milik Pt. ANDHIKA MUTIARA LESTARI
kepada Singkamas Agung Ltd. atau pihak lain yang ditunjuk oleh Singkamas Ltd.
Pendiri PT. ANDHIKA MUTIARA LESTARI
/s/ /s/
- - ----------------------- ------------------------
Adnan Alamsyah Sulaiman Sulaiman
/s/ /s/
- - ----------------------- ------------------------
Sri Aslinda Sulaiman Drs. Ardiansyah Sulaiman
/s/
- - -------------------------
Anwar Heriansyah Sulaiman
<PAGE> 114
EXHIBIT IV
RECEIPTS
<PAGE> 115
[SEAL]
[ILLEGIBLE COPY]
<PAGE> 116
[TRANSLATION NOT CURRENTLY AVAILABLE, BUT WILL BE PROVIDED BY AMENDMENT.]
[SEAL]
Nomor :
Lampiran :
Hal : Penyetoran uang Jaminan Kesungguhan
Yang terhormat
PT. Andhika Mutiara Lestari
Komp. Pinang Babaris Blok A/47-
48 Samarinda Kaltim
Berdasarkan Edaran kami No.02/E/80/DJP/1996 tanggal 16 Januari
1996 yang merupakan penyempurnaan dari Edaran No.01/E/80/DJP/1996
tanggal 8 Januari 1996, maka dalam rangka memenuhi persyaratan
pengajuan permohonan Kontrak Karya Batubara*, kepada Saudara diminta
menyetorkan/transfer uang sebesar Rp 1.198.000.000 (Satu millar
seratus sembilan puluh delapan Juta Rupiah) atau AS
$..........................
....................................................) pada rekening
Direktur Jenderal Pertambangan Umum No.700.087.06025.2.01.5 (untuk
rupiah) atau Nomor 3081.411.0180.4 (untuk dollar Amerika Serikat) pada
PT. Bank Dagang Negara (Persero) Cabang Jakarta Wisma Baja Jalan
Jenderal Gatot Subroto Kav. 54 Jakarta 12950 dan didepositokan atas
nama Direktur Jenderal Pertambangan Umum qq perusahaan Saudara.
Bukti penyetoran/transfer tersebut dilampirkan pada Daftar Isian
Permohonan Kontrak Karya Batubara yang Saudara ajukan.
Apabila sampai dengan tanggal 29 Maret 1996, Saudara tidak melaksanakan
penyetoran/transfer dimaksud, maka wilayah yang telah dicadangkan dinyatakan
bebas dan terbuka kembali untuk umum.
Demikian untuk Saudara laksanakan.
DIREKTUR JENDERAL PERTAMBANGAN UMUM
SEKRETARIS DIREKTORAT JENDERAL PERTAMBANGAN UMUM,
[SEAL]
/s/
NASRI YUNUS ANIS, SH
NIP. 100001656
Tembusan:
1. Kepala Bagian Perundang-undangan, SDJPU
2. Direksi PT. Bank Dagang Negara (Persero) Cabang Jakarta Wisma
Baja.
<PAGE> 1
EXHIBIT 10(XXI)
KALIMAS JAYA LTD.
ACQUISITION AGREEMENT FOR GOLD & COAL CONCESSIONS
Whereas this Acquisition Agreement (AA) is made and entered into on this 18th
day of February 1997, by and between:
1. KALIMAS JAYA LTD. (hereinafter referred to as "KALIMAS"), a corporation
organized under the laws of the Bahamas and having representative offices
in Singapore. Kalimas is represented in this transaction by William Chan
(Chan); and,
2. KALIMANTAN RESOURCES LTD. (hereinafter referred to as "KALIMANTAN"), a
corporation organized under the laws of the Commonwealth of the British
Virgin Islands, and having registered offices in the Commonwealth of the
British Virgin Islands. Kalimantan is a wholly owned subsidiary of Nevada
Manhattan Mining Inc. which has a representative office at 5038 North
Parkway Calabasas, Suite 100, Calabasas, CA 91302. Kalimantan is
represented in the AA by Christopher Michaels (CDM) and Jeffrey Kramer
(JK).
Kalimas and Kalimantan are hereinafter referred to the "PARTIES" to this AA.
WITNESSETH
I. CONTRACTUAL TRANSACTIONS
Whereas Kalimas controls potential gold mining concessions as well as potential
coal mining concessions (hereinafter referred to as the "CONCESSIONS") in
Central & East Kalimantan, Indonesia as well as in Central Sumatra, Indonesia.
The Concessions are described as follows:
THE MUNUNG GOLD MINING CONCESSION
- 6,096 Hectares
- Location: Central Kalimantan
- Northwest of the Kelian Gold Mine
- KP for General Survey & Exploration; Issued in August 1996
1
<PAGE> 2
THE TELEN GOLD MINING CONCESSION
- 687 Hectares
- Location: East Kalimantan
- East of Busang Deposits
- KP for General Survey & Exploration; Issued in August 1996
THE LONG BELEH GOLD MINING CONCESSION
- 4,637 Hectares
- Location: East Kalimantan
- South of Busang Deposits
- KP for General Survey & Exploration; Issued in September 1996
THE RIAU GOLD MINING CONCESSIONS(2)
Sengingi Concession
- 4,000 Hectares
- Location: Central Sumatra in the Province of Riau
- KP Exploitation
Kuantan Concession
- 8,000 Hectares
- Location: Central Sumatra in the Province of Riau
- KP Exploitation
2
<PAGE> 3
THE BERAU COAL MINING CONCESSION
- 100,000 Hectares
- Location: Southeast Kalimantan
- Government License: To be provided in Jakarta by PT Kresna
TambangSawah
The geographic descriptions & information as well as all other relevant
Government Licenses in respect of the Concessions is included in Exhibit I
which is attached to this Agreement.
Kalimas has acquired these five (5) Concessions and has executed the written
agreements through a series of "Development Agreements" between Kalimas and a
group of local Indonesian companies (hereinafter referred to as the "LOCAL
INDONESIAN PARTNERS") designated as follows:
1. PT Walea Bahimas
2. PT Aksara Mina Artha
3. PT Kresna Tambang Sawah
4. PT Muara Mayang Coal Utama
5. PT Muara Koman Mas
As a prelude to the signing of this Agreement, Kalimas has introduced,
evaluated, recommended, and secured these Concessions to Kalimantan, and for
which consideration will be outlined and described later in this Agreement.
Under the terms of the Development Agreements between Kalimas and the Local
Indonesian Partners, it was agreed that the Local Indonesian Partners would be
responsible for obtaining all necessary government licenses and, most
importantly, the Exploitation Licenses and/or Contracts of Work (hereinafter
referred to as "COWs"), for the development, exploration, and exploitation of
gold/other metals and coal from the Concessions; furthermore, the Local
Indonesian Partners would seek and obtain all other necessary government
licenses, such as those associated with refinery & production as well as
transport & sale of the respective natural resources. Under the terms of the
Development Agreements, Kalimas has the effective control to consummate this
Agreement. As described in the Development Agreements, Kalimas has the
controlling interest in each of these Concessions and is to provide certain
development funding and other mining and management expertise, all of which has
already been negotiated. The specific terms of the cash funding as well as
other
3
<PAGE> 4
considerations which are to be paid is accurately described in the Development
Agreements, all of which are attached herewith in EXHIBIT II. Additionally, it
was agreed between Kalimas and the Local Indonesian Partners that Kalimas would
be entitled to appoint a third party, such as Kalimantan and/or its' local
Indonesian nominee company, to accept a transfer of the relevant government
licenses in respect of the Concessions (simultaneously with the filings for the
Exploitation Licenses and/or COWs).
On the basis of this Agreement, the Parties agree that in the event that the
Local Indonesian Partners are unable to perform the required obligations and
responsibilities with respect to seeking and acquiring the necessary government
licenses and, in particular, the Exploitation Licenses and/or COWs,
Kalimantan/Nevada (with the assistance of Kalimas as necessary) has a first
right to step in with respect to any and all title and/or licensing issues, and
to cure or effectuate them as needed. This may adjust required payments for
said properties at the sole expense of seller(s).
The Parties further agree that any additional information, points of agreement,
clarification and/or amendments in respect of the Concessions will be attached
to this Acquisition Agreement as ADDENDUMS.
Whereas KALIMANTAN is a wholly-owned subsidiary company of Nevada
Manhattan Mining Inc. (hereinafter referred to as "NEVADA") which currently
operates gold mining concessions in the state of Nevada. Kalimantan has the
desire, interest, and ability to acquire and finance the exploration,
development, and exploitation of the Concessions (hereinafter referred to as
the "TRANSACTIONS"). Kalimantan/Nevada is prepared to conduct its' due
diligence process to verify the values on the Concessions.
II. CONSIDERATION FOR THE TRANSACTION
Under the terms of this Acquisition Agreement for the gold and coal
concessions, the Parties agree on the following for the development,
exploration, and exploitation of the Concessions:
Kalimas will merge 51% of its' control and interest in each of the
Concessions into Kalimantan or its' proper designee for the following
terms, conditions, and consideration:
4
<PAGE> 5
1. Kalimantan's parent company, Nevada, will issue Common Shares of Nevada's
Common Stock to Kalimas on the following basis:
The number of shares of Nevada's Common Stock to be issued to Kalimas will
be done on a negotiated basis and which will be determined after
Kalimantan/Nevada has performed its' due diligence and verification of the
Concessions within a 90 to 180 day period from the date of the signing of
this Agreement. The consideration to this Agreement is based upon the
current price of Nevada's stock, which is approximately $10 per share;
thus, any number of shares to be issued to Kalimas will be on the basis of
this current market price and will be determined once the appropriate
examination and negotiations are finalized and completed. Any shares to be
negotiated and issued as a signing bonus for this Agreement will be issued
as free trading shares or shares with Piggy-back registration rights. Any
further shares above and beyond those shares issued as "Bonus Shares" will
be issued upon an independent economic valuation of the Concessions, and at
which time the gross value will be negotiated by the Parties. Moreover, the
economic valuation of the Concessions will be based upon prevailing
industry standards. Twenty-five percent (25%) of any of the shares to be
issued in consideration for the valuation of the Concessions will be free
trading or have Piggy-back registration rights.
2. Cash payment(s) of approximately USD$5,000,000 to USD$6,000,000 will be
assumed by Kalimantan/Nevada in accordance with the financial obligations
as described in the Development Agreements, all of which are to be
finalized and paid at a date to be determined by the Parties after the
results from the gold and coal concessions are completed by
Kalimantan/Nevada in the above referenced economic valuations. Any
additional cash payments are to be discussed at a later date as necessary.
3. Exploration Program & Board Representation
(a) Kalimantan must commence exploration on the Concessions within 6
months but not later than 12 months from the execution of this AA.
(b) Kalimas will be entitled to Board representation on Nevada's
Board of Directors.
5
<PAGE> 6
4. Default Provisions
(a) Kalimantan/Nevada, Christopher Michaels & Jeffrey Kramer shall be
deemed "key men" to the management of Kalimantan/Nevada and to this
transaction. If there is any change in corporate management without Mr.
Michaels or Mr. Kramer and without the express written consent of
Kalimas, then this Agreement shall be deemed in default and these gold
and coal concessions shall revert back to Kalimas at no cost to
Kalimas.
(b) In the event that Kalimantan/Nevada is unable to complete the
development of any of the above concessions, it is mutually agreed
by the Parties that its interests shall be prorated under some
mutually agreed formula.
5. Kalimas reserves the right to substitute or add other gold or coal mining
concessions of like potential value with the approval of Kalimantan/Nevada.
6. Voting Trust: Kalimas will vote its shares in favor of management as long
as CDM and JK are executives of Kalimantan/Nevada.
7. All exploration, operating, and budgetary costs to effectuate the Company's
due diligence and development of the Concessions will be 100% undertaken by
Kalimantan and/or Nevada and will be fully recoupable prior to any
distribution of profits, except to the Local Indonesian Partners in this
Agreement.
8. It is understood that this agreement and all compensation agreed hereto by
both parties above holds true throughout any and all Kalimantan
subsidiaries and spin-off public companies that may arise through any
corporate structure reorganization.
9. Kalimas will use its best efforts and good faith to fully cooperate with
Kalimantan/Nevada to succeed, especially in Indonesia.
6
<PAGE> 7
The execution of this AA is legal and binding on all Parties, and this
Agreement is ratified by the Board of Directors of both corporations.
Kalimas has executed this Agreement in the Republic of Singapore on this
18th day of February, 1997.
NMMC has executed this Agreement in the Republic of Brasil on the
24th day of February 1997.
SIGNATORIES
Nevada Manhattan Mining Inc. and
Kalimantan Resources Ltd. Kalimas Jaya Ltd.
/s/ Christopher Michaels /s/ William Chan
- - ------------------------------- ---------------------------------
Name: Christopher Michaels Name: William Chan
Title: Chairman/CEO Title: President Director
- - -------------------------------
Name: Jeffrey Kramer
Title: President
7
<PAGE> 8
[TRANSLATION NOT CURRENTLY AVAILABLE, BUT WILL BE PROVIDED BY AMENDMENT.]
DEPARTEMEN PERTAMBANGAN DAN ENERGI REPUBLIK INDONESIA
DIREKTORAT JENDERAL PERTAMBANGAN UMUM
KEPUTUSAN DIREKTUR JENDERAL PERTAMBANGAN UMUM
Nomor: 378. K / 2012 / DDJP / 1996
TENTANG
PEMBERIAN KUASA PERTAMBANGAN PENYELIDIKAN UMUM
(KW. 96JLP079)
DIREKTUR JENDERAL PERTAMBANGAN UMUM
Membaca : Surat permohonan PT. MUARA MAYANG COAL UTAMA
tanggal 18 Juli 1996.
Menimbang : bahwa permohonan yang bersangkutan tclah memenuhi
syarat-syarat sebagaimana ditentukan dalam peraturan
perundang-undangan yang berlaku.
Mengingat : 1. Undang-undang No. 11 Tahun 1967 (LNRI Th 1967 No. 22,
TLNRI No. 2831);
2. Peraturan Pemerintah No. 32 Tahun 1969 (LNRI Th 1969
No. 60, TLNRI No. 2916) sebagaimana telah diubah dengan
Peraturan Pemerintah No. 79 Tahun 1992 (LNRI Th 1992
No. 130, TLNRI No. 3510);
3. Keputusan Presiden RI No. 343/M Tahun 1993 Tanggal 11
September 1993;
4. Keputusan Menteri Pertambangan dan Energi No. 2027
K/201/M.PE/1985 Tanggal 18 September 1985;
5. Keputusan Direktur Jenderal Pertambangan Umum
No.03.K/201/DDJP/1996 tanggal 8 Januari 1996.
Memperhatikan : Surat Direktur Teknik Pertambangan Umum
Nomor : 2088/2012/DPT/1996 tanggal 13 Augustus 1996
MEMUTUSKAN
Menetapkan :
PERTAMA : Memberikan Kuasa Pertambangan Penyelidikan Umum untuk
jangka waktu 1(satu) tahun.
Kepada : PT. MUARA MAYANG COAL UTAMA
Alamat : Jl. Cengkeh 21 F-C
Jakarta
Atas suatu wilayah tertanda KW. 96JLP079 terletak di
Kabupaten Barito Utara, Propinsi Kalimantan Tengah, seluas
6.096,000 (enam ribu sembilan puluh enam) hektar.
Dengan penjelasan batas wilayah dan Peta Kuasa Pertambangan
sebagaimana tercantum pada lampiran I untuk mengadakan
penyelidikan umum dengan memenuhi kewajiban-kewajiban tersebut
dalam lampiran II Keputusan ini serta ketentuan peraturan
perundang-undangan yang berlaku.
KEDUA : Kuasa Pertambangan ini tidak dapat di perpanjang dan dapat
dibatalkan walaupun masa berlakunya belum habis, apabila
Pemegang Kuasa Pertambangan tidak memenuhi kewajiban-kewajiban
yang tercantum di dalam lampiran II Keputusan ini dan
ketentuan peraturan perundang-undangan yang berlaku.
<PAGE> 9
[TRANSLATION NOT CURRENTLY AVAILABLE, BUT WILL BE PROVIDED BY AMENDMENT.]
- 2 -
KETIGA : Pemegang Kuasa Pertambangan yang bermaksud mengadakan
kerjasama dengan pihak modal asing dalam rangka Perjanjian
Karya terlebih dahulu harus memperoleh izin tertulis dari
Menteri Pertambangan dan Energi cq. Direktur Jenderal
Pertambangan Umum.
KEEMPAT : Keputusan Direktur Jenderal ini mulai berlaku pada
tanggal ditetapkan.
Kitetapkan di Jakarta
pada tanggal 28 Agustus 1996
DIREKTUR JENDERAL PERTAMBANGAN UMUM
[SEAL]
/s/ KUNTORO MANGKUSUBROTO
--------------------------------
Kuntoro Mangkusubroto
TEMBUSAN :
1. Menteri Pertambangan dan Energi di Jakarta (dengan peta);
2. Menteri Kehutanan di Jakarta (dengan peta);
3. Menteri Negara Penggerak Dana Investasi/Ketua Badan Korrdinasi
Penanaman Modal di Jakarta (tanpa peta);
4. Menteri Negara Agraria/Kepala Badan Pertanahan Nasional di Jakarta
(DENGAN PETA);
5. Sekretaris Jeneral Departemen Pertambangan Dan Energi di Jakarta
(dengan peta);
6. Inspektur Jenderal Departemen Partambangan dan Energi di Jakarta
(dengan peta);
7. Direktur Jenderal Deologi dan Sumberdaya Mineral up. Direktur Direktorat
Sumberdaya Mineral, Jl.Diponegoro No. 57 Bandung (dengan peta);
8. Direktur Jenderal Pemerintahan Umum dan Otonomi Daerah, Departemen
Dalam Negeri di Jakarta (tanpa peta);
9. Direktur Jenderal Perlindungan Hutan dan Pelestarian Alam, Departemen
Kehutanan Jl.H. Ir. Juanda No. 9 Bogor (dengan peta);
10. Direktur Jenderal Inventarisasi dan Tataguna Hutan, Departemen Kehutanan
di Jakarta (dengan peta);
11. Kepala Biro Hukum, Sekretariat Jenderal Departemen dan Energi di
Jakarta (dengan peta);
12. Kepala Biro Humum, Sekretariat Jenderal Departemen Pertambangan dan
Energi di Jakarta (tanpa peta);
13. Direktur Teknik Pertambangan Umum di Jakarta (dengan peta);
14. Direktur Pembinaan Pengusahaan Pertambangan di Jakarta (dengan peta);
15. Gubernur Kepala Daerah Tingkat I Propinsi Kalimantan Tengah di
Palankaraya (dengan peta);
16. Kepala Kantor Wilayah Departemen Pertambangan dan Energi di Palangkaraya
(dengan peta);
17. Kepala Kantor Wilayah Departemen Kehutanan di Palankaraya (dengan peta);
18. Bupati Kepala Daerah Tingkat Ii Kabupaten Barito Utara di Muara Teweh
(dengan peta);
<PAGE> 10
[TRANSLATION NOT CURRENTLY AVAILABLE, BUT WILL BE PROVIDED BY AMENDMENT.]
- 3 -
Lampiran I : KEPUTUSAN DIREKTUR JENDERAL PERTAMBANGAN UMUM
Nomor : 378.K/2012/DDJP/1996
tanggal : 28 Agustus 1996
LAMPIRAN DAFTAR KOORDINAT
Nama Perusahaan : PT. MUARA MAYANG COAL UTAMA
Lokasi
- - - Propinsi : KALIMANTAN TENGAH
- - - Kabupaten : BARITO UTARA
- - - Kecamatan : -
- - - Kode Wilayah : 96JLP079
Luas : 6.096 Ha
- - -----------------------------------------------------------------------------
No. Garis Bujur (BT) Garis Lintang
Titik --------------------------------------------------------------------
o ' " o ' " LU/LS
- - -----------------------------------------------------------------------------
1 114 50 30.00 0 17 0.00 LU
2 114 50 30.00 0 20 30.00 LU
3 114 47 0.00 0 20 30.00 LU
4 114 47 0.00 0 23 0.00 LU
5 114 52 0.00 0 23 0.00 LU
6 114 52 0.00 0 17 0.00 LU
- - -----------------------------------------------------------------------------
Direktur Jenderal Pertambangan Umum
/s/ Kuntoro Mangkusubroto
------------------------------------
Kuntoro Mangkusubroto
<PAGE> 11
[TRANSLATION NOT CURRENTLY AVAILABLE, BUT WILL BE PROVIDED BY AMENDMENT.]
- 4 -
[LOCATION MAP]
PETA WILAYAH KUASA PERTAMBANGAN
Diperuntukkan bagl : PT. MUARA MAYANG COAL UTAMA
Tanggal Proses : 11 JULI 1996
Operator : UMAR ANTANA
Kode Wilayah : 96JLP079
LOKASI KEGIATAN
Propinsl : KALIMTAN TENGAH
Kabupaten : BARITO UTARA
Kecamatan : -
Tahap : PENYELIDIKAN UMUM
Luas areal : 6.096 Ha
UNIT PELAYANAN INFORMASI DAN
PENCADANGAN WILAYAH PERTAMBANGAN (UPIPWP)
DIREKTORAT JENDERAL PERTAMBANGAN UMUM
DEPARTEMEN PERTAMBANGAN DAN ENERGI
PETA WILAYAH KUASA PERTAMBANGAN
<PAGE> 12
[TRANSLATION NOT CURRENTLY AVAILABLE, BUT WILL BE PROVIDED BY AMENDMENT.]
- 5 -
LAMPIRAN II : KEPUTUSAN DIREKTUR JENDERAL PERTAMBANGAN UMUM
Nomor : 378. K/2012/DDJP/1996
Tanggal : 28 Agustus 1996
KEWAJIBAN-KEWAJIBAN PEMEGANG KUASA PERTAMBANGAN PENYELIDIKAN UMUM
I. Pemegang Kuasa Pertambangan ini telah memilih tempat tinggal (domisili)
pada pengadilan Negeri yang berfedudukan di Ibukota Propinsi Kalimantan
Tengah di Palangkaraya.
II. Sebelum melakukan kegiatan, pemegang Kuasa pertambangan ini harus lebih
dahulu memberitanhukan kepada Pemerintah Daerah Propinsi Kalimantan
Tengah.
III. Hubungan antara pemegang Kuasa Pertambangan dengan pemilik tanah dan
pihak ketiga diatur menurut ketentuan-ketentuan yang berlaku.
IV. Penegang Kuasa Pertambangan Penyelidikan Umum diwajibkan membayar
Iuran Tetap menurut ketentuan-ketenuan yang berlaku dan harus dilunasi
sebelum berakhirnya Kuasa Pertambangan.
V. Jika terjadi pertindihan Wilayah Kuasa Pertambangan dengan kepentingan
lahan lainnya, maka pemegang Kuasa Pertambangan sebelum melaksanakan
kegiatan dalam wilayah tersebut harus lebih dahulu menyelesaikannya
sesuai dengan ketentuan yang berlaku.
VI. Pemegank Kuasa Pertambangan harus memberiken laporan kegiatan 3 (tiga)
bulan sekali kepada Direktur Jenderal Pertambangan Umum (1 expl) dan
tembusannya disampaikan kepada Direktur Teknik Pertambangan Umum
(3 expl), Kepala Kantor Wilayah Departemen Pertambangan dan Energi
di Palangkaraya (1 exple), Gubernur dan Bupati Kepala Daerah setempat
(masing-masing 1 expl) paling lambat 10 (sepuluh) hari setelah
berakhirnya triwulan.
VII. Dalam tempo 15 (lima belas) hari setelah keluarnya Keputusan ini,
pemegang Kuasa Pertambangan wajib menyerahkan Rencana Kerja dan Rencana
Pembiayaan untuk daerah yang dimaksud dalam Keputusan ini.
VIII. Pemegang Kuasa Pertambangan diwajibkan memberikan fasilitas jalan atau
fasilitas lainnya kepada pemegang Kuasa Pertambangan lain apabila
diperlukan sesuai dengan kesepakatan.
IX. Dalam Bidang Pengawasan
a. Penegang Kuasa Pertambangan harus mengindahkan/mentaati peraturan
yang berlaku mengenai Pengawasan Keselamatan dan Kesehatan Kerja
serta Lingkungan di bidang Pertambangan Umum.
b. Pengawasan atas pelaksanaan Kuasa Pertambangan ini dilakukan oleh
Pelaksana Inspeksi Tambank dan/atau petugas yang ditunjuk.
c. Pemegank Kuasa Pertambangan dapat meminta kepada petugas tersebut
untuk memperlihatkan surat-surat pengenal dan surat-surat tugasnya.
<PAGE> 13
[TRANSLATION NOT CURRENTLY AVAILABLE, BUT WILL BE PROVIDED BY AMENDMENT.]
- 6 -
X. a. Peemohonan Kuasa Pertambangan Eksplorasi sebagai peningkatan Kuasa
Pertambangan Penyelidikan Umum harus diajukan 3 (tiga) bulan sebelum
berakhirnya masa izin ini kepada Direktur Jenderal Pertambangan Umum.
b. Atas Kelalaian tersebut pada huruf a, mengakibatkan:
1. Kuasa Pertambangan berakhir menurut hukum dan segala usaha
pertambangan harus dihentikan
2. Selambat-lambatnya dalam waktu 6 (enam) bulan sejak tanggal
berakhirnya Keputusan ini, pemegang Kuasa Pertambangan mengangkat
keluar segala sesuatu yang menjadi milliknya kecuali benda-benda/
bangunan - bnagunan yang dipergunakan untuk kepentingan umum.
DIREKTUR JENDERAL PERTAMBANGAN UMUM
/s/ KUNTORO MANGKUSUBROTO
-------------------------------------
Kuntoro Mangkusubroto
<PAGE> 14
[TRANSLATION NOT CURRENTLY AVAILABLE, BUT WILL BE PROVIDED BY AMENDMENT.]
DEPARTEMEN PERTAMBANGAN DAN ENERGI REPUBLIK INDONESIA
DIREKTORAT JENDERAL PERTAMBANGAN UMUM
KEPUTUSAN DIREKTUR JENDERAL PERTAMBANGAN UMUM
Nomor: 379. K / 2012 / DDJP / 1996
TENTANG
PEMBERIAN KUASA PERTAMBANGAN PENYELIDIKAN UMUM
(KW. 96JLP071)
DIREKTUR JENDERAL PARTAMBANGAN UMUM
Membaca : Surat permohonan PT. WALEA BAHIMAS
tanggal 18 Juli 1996.
Menimbang : bahwa permohonan yang bersangkutan telah memenuhi
syarat-syarat sebagaimana ditentukan dalam peraturan
perundang-undangan yang berlaku.
Mengingat : 1. Undang-undang No. 11 Tahun 1967 (LNRI Th 1967 No. 22,
TLNRI No. 2831);
2. Peraturan Pemerintah No. 32 Tahun 1969 (LNRI Th 1969 No.
60, TLNRI No. 2916) sebagaimana telan diubah dengan
Peraturan Pemerintah No. 79 Tahun 1992 (LNRI Th 1992 No.
130, TLNRI No. 3510);
3. Keputusan Presiden RI No. 343/M Tahun 1993 Tanggal 11
September 1993;
4. Keputusan Menteri Pertambangan dan Energi
No. 2027 K/201/M.PE/1985 Tanggal 18 September 1985;
5. Keputusan Direktur Jenderal Pertambangan Umum
No.03.K/201/DDJP/1996 tanggal 8 Januari 1996.
Memperhatikan : Surat Direktur Teknik Pertambangan Umum Nomor:
2089/2012/DPT/1996 tanggal 13 Agustus 1996
MEMUTUSKAN
Menetapkan :
PERTAMA : Memberikan Kuasa Pertambangan Penyelidikan Umum untuk jangka
waktu 1 (satu) tahun.
Kepada : PT. WALEA BAHIMAS
Alamat : Jl. Kayu Putih Tengah I D/3A Jakarta Timur
Atas suatu wilayah tertanda KW.96JLP071 terletak di Kabupaten
Kutai, Propinsi Kalimantan Timur, seluas 687,00 (enam ratus
delapan puluh tujuh) hektar.
Dengan penjelasan batas wilayah dan Peta Kuasa Pertambangan
sebagiamana tercantum pada lampiran I untuk mengadakan
penyelidikan umum dengan memenuhi kewajiban-kewajiban
tersebut dalam lampiran II Keputusan ini serta ketentuan
peraturan perundang-undangan yang berlaku.
KEDUA : Kuasa Pertambangan ini tidak dapat di perpanjang dan dapat
dibatalkan walaupun masa berlakunya belum habis, apabila
Pemegang Kuasa Pertambangan tidak memenuhi
kewajiban-kewajiban yang tercantum di dalam lampiran II
Keputusan ini dan ketentuan peraturan perundang-undangan yang
berlaku.
<PAGE> 15
[TRANSLATION NOT CURRENTLY AVAILABLE, BUT WILL BE PROVIDED BY AMENDMENT.]
KETIGA : Pemegang Kuasa Pertambangan yang bermaksud mengadakan
kerjasama dengan pihak modal asing dalam rangka Perjanjian
Karya terlebih dahulu harus memperoleh izin tertulis dari
Menteri Pertambangan dan Energi cq. Direktur Jenderal
Pertambangan Umum.
KEEMPAT : Keputusan Direktur Jenderal ini mulai berlaku pada tanggal
ditetapkan.
Ditetapkan di JAKARTA
pada tanggal 28 Agustus 1996
DIREKTUR JENDERAL PERTAMBANGAN UMUM
[SEAL]
KUNTORO MANGUSKUBROTO
TEMBUSAN:
1. Menteri Pertambangan dan energi di Jakarta (dengan peta);
2. Menteri Kehutanan di Jakarta (dengan peta).;
3. Menteri Negara Penggerak Dana Investasi/Ketua Badan Koordinasi Penanaman
Modal di Jakarta (tanpa peta);
4. Menteri Negara Agaria/Kepala Badan Pertanahan Nasional di Jakarta (dengan
peta);
5. Sekretaris Jenderal Departemen Pertambangan dan Energi di Jakarta (dengan
peta);
6. Inspektur Jenderal Departemen Pertambangan dan Energi di Jakarta (dengan
peta);
7. Direktur Jenderal Geologi dan Sumberdaya Mineral up. Direktur Direktorat
Sumberdaya Mineral, J1. Diponegoro No. 57 Bandung (dengan peta);
8. Direktur Jenderal Pemerintahan Umum dan Otonomi Daerah, Departemen Dalam
Negeri di Jakarta (tanpa peta);
9. Direktur Jenderal Perlindungan Hutan dan Pelestarian alam, Departemen
Kehutanan J1. H. Ir. Juana No. 9 Bogor (dengan peta);
10. Direktur Jenderal Inventarisasi dan Tataguna Hutan, Departemen Kehutanan di
Jakarta (dengan peta);
11. Kepala Biro Hukum Sekretariat Jenderal Departemen Pertambangan dan Energi
di Jakarta (dengan peta);
12. Kepala Biro Keuangan, Sekretariat Jenderal Departemen Pertambangan dan
Energi di Jakarta (tanpa peta);
13. Direktur Teknik Pertambangan Umum di Jakarta (dengan peta);
14. Direktur Pembinaan Pengusahaan Pertambangan di Jakarta (dengan peta);
15. Gubernur Kepala Daerah Tingkat Propinsi Kalimantan Timur di Samarinda
(dengan peta);
16. Kepala Kantor Wilayah Departemen Pertabangan dan Energi di Samarinda
(dengan peta);
17. Kepala Kantor Wilayah Departemen Kehutanan di Samarinda (dengan peta);
18. Bupati Kepala Daerah Tingkat II Kabupaten Kutai di Tenggarong (dengan peta);
<PAGE> 16
[TRANSLATION NOT CURRENTLY AVAILABLE, BUT WILL BE PROVIDED BY AMENDMENT.]
Lampiran II: Keputusan Direktur Jenderal Pertambangan Umum
Nomor : 379.K/2012/DDJP/1996
Tanggal : 28 Agustus 1996
KEWAJIBAN-KEWAJIBAN PEMAGANG KUASA PERTAMBANGAN PENYELIDIKAN UMUM
I. Pemegang Kuasa Pertambangan ini telah memilih tempat tinggal (domisili)
pada pengadilan Negeri yang berkedudukan di Ibukota Prominsi Kalimantan
Timur di Samarinda.
II. Debelum melakukan kegiatan, pemegang Kuasa Pertambangan ini harus lebih
dahulu memberitahukan kepada Pemerintah Daerah Propinsi Kalimantan
Timur.
III. Hubungan antara pemegang Kuasa Pertambangan dengan pemilik tanah dan
pihak ketiga diatur menurut ketentuan-ketentuan yang berlaku.
IV. Pemegang Kuasa Pertambangan Penyelidikan Umum diwajibkan membayar Iuran
Tetap menurut ketentuan-ketentuan yang berlaku dan harus dilunasi
sebelum berakhirnya Kuasa Pertambangan.
V. Jika terjadi pertindihan Wilayah Kuasa Pertambangan dengan kepentingan
lahan lainnya, maka pemegang Kuasa Pertambangan sebelum melaksanakan
kegiatan dalam wilayah tersebut harus lebih dahulu menyelesaikannya
sesuai dengan ketentuan yang berlaku.
VI. Pemegang Kuasa Pertambangan harus memberikan laporan kegiatan 3 (tiga)
bulan sekali kepada Direktur Jenderal Pertambangan Umum (1 expl) dan
tembusannya disampaikan kepada Direktur Teknik Pertambangan Umum (3
expl), Kepala Kantor Wilayah Departemen Pertambangan dan Energi di
Samarinda (1 expl), Gubernur dan Bupati Kepala Daerah setempat
(masing-masing 1 expl) paling lambat 10 (sepuluh) hari setelah
berakhirnya triwulan.
VII. Dalam tempo 15 (lima belas) hari setelah keluarnya Keputusan ini,
pemegang Kuasa Pertambangan wijib menyerahkan Rencana Kerja dan Rencana
Pembiayaan untuk daerah yang dimaksud dalam keputusan ini.
VIII. Pemegang Kuasa Pertambangan diwajibkan memberikan fasilitas jalan atau
fasilitas lainnya kepada pemegang Kuasa Pertambangan lain apabila
diperlukan sesuai dengan kesepakatan.
IX. Dalam Bidang Pengawasan
a. Pemegang Kuasa Pertambangan harus mengindahkun/mentaati peraturan
yang berlaku mengenai PengawasanKeselamatan dan Kesehatan Kerja
serta Lingkungan di bidang Pertambangan Umum.
b. Pengawasan atas pelaksanaan Kuasa Pertambangan ini dilakukan oleh
Pelaksana Inspeksi Tambang dan/atau petugas yang ditunjuk.
c. Pemegang Kuasa Pertambangan dapat meminta kepada petugas tersubut
untuk memperlihatkan surat-surat pengenal dan surat-surat tugasnya.
<PAGE> 17
[TRANSLATION NOT CURRENTLY AVAILABLE, BUT WILL BE PROVIDED BY AMENDMENT.]
X. a. Permohonan Kuasa Pertambangan Eksplorasi sebagai peningkatan Kuasa
Pertambangan Penyelidikan Umum harus diajukan 3 (tiga) bulan sebelum
berakhirnya masa izin ini kepada Direktur Jenderal Pertambangan Umum.
b. Atas kelalaian tersebut pada huruf a, mengakibatkan:
1. Kuasa Pertambangan berakhir menurut hukum dan segala usaha
pertambangan harus dihentikan
2. Selambat-lambatnya dalam waktu 6 (enam) bulan sejak tanggal
berakhirnya Keputusan ini, pemegang Kuasa Pertambangan mengangkat
keluar segala sesuatu yang menjadi milliknya kecuali benda-benda/
bangunan-bangunan yang dipergunakan untuk kepentingan umum.
DIREKTUR JENDERRAL PERTAMBANGAN UMUM
[SEAL]
KUNTORO MANGKUSUBROTO
<PAGE> 18
[TRANSLATION NOT CURRENTLY AVAILABLE, BUT WILL BE PROVIDED BY AMENDMENT.]
[A MAP OF
KAB. KUTAI
PROP.KALIMANTAN TIMUR]
<PAGE> 19
[TRANSLATION NOT CURRENTLY AVAILABLE, BUT WILL BE PROVIDED BY AMENDMENT.]
Lampiran I : KEPUTUSAN DIREKTUR JENDERAL PERTAMBANGAN UMUM
Nomor : 379.K/2012/DDJP/1996
Tanggal : 28 Agustus 1996
LAMPIRAN DAFTAR KOORDINAT
Nama Perusahaan : PT.WALEA BAHIMAS
Lokasi
- - - Propinsi : KALIMANTAN TIMUR
- - - Kabupaten : KATAI
- - - Kecamatan : -
- - - Kode Wilayah : 96JLP071
Luas : 687 Ha
<TABLE>
<CAPTION>
========================================================================
No. Garis Bujur (BT) Garis Lintang
Ti- ----------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
ti 0 ' " 0 ' " LU/LS
- - ------------------------------------------------------------------------
1 116 54 0.00 0 37 0.00 LU
2 116 54 0.00 0 36 30.00 LU
3 116 50 0.00 0 36 30.00 LU
4 116 50 0.00 0 37 0.00 LU
========================================================================
</TABLE>
Direktur Jenderal Pertambangan Umum
[SEAL]
Kuntoro Mangkusubroto
<PAGE> 20
[TRANSLATION NOT CURRENTLY AVAILABLE, BUT WILL BE PROVIDED BY AMENDMENT.]
DEPARTEMEN PERTAMBANGAN DAN ENERGI REPUBLIK INDONESIA
DIREKTORAt JENDERAL PERTAMBANGAN UMUM
KEPUTUSAN DIREKTUR JENDERAL PERTAMBANGAN UMUM
Nomor: 422.K / 2012 / DDJP / 1996
TENTANG
PEMBERIAN KUASA PERTAMBANGAN PENYELIDIKAN UMUM
(KW. 96AGP047)
DIREKTUR JENDERAL PERTAMBANGAN UMUM
Membaca : Surat permohonan PT. MUARA KOMAN MAS
tanggal 21 Agustus 1996.
Menimbang : bahwa permohonan yang bersangkutan telah memenuhi
syarat-syarat sebagaimana ditentukan dalam peraturan
perundang-undangan yang berlaku.
Mengingat : 1. Undang-undang No. 11 Tahun 1967 (LNRI Th 1967 No. 22,
TLNRI No. 2831);
2. Peraturan Pemerintah No. 32 Tahun 1969 (LNRI Th 1969 No.
60, TLNRI No. 2916) sebagaimana telah diubah dengan
Peraturan Pemerintah No. 79 Tahun 1992 (LNRI Th 1992 No.
130, TLNRI No. 3510);
3. Keputusan Presiden RI No. 343/M Tahun 1993 Tanggal 11
September 1993;
4. Keputusan Menteri Pertambangan dan Energi No.
2027 K/201/M.PE/1985 Tanggal 18 September 1985;
5. Keputusan Direktur Jenderal Pertambangan Umum
No.03.K/201/DDJP/1996 tanggal 8 Januari 1996.
Memperhatikan : Surat Direktur Teknik Pertambangan Umum
Nomor: 2215/2012/DPT/1996 tanggal 26 Agustus 1996
MEMUTUSKAN
Menetapkan :
PERTAMA : Memeberikan Kuasa Pertambangan Penyelidikan Umum untuk jangka
watku 1 (satu) tahun.
Kepada : PT. MUARA KOMAN MAS
Alamat : Komplek Pertokoan Pulo Mas Blok VII/15-16
Jakarta Timur
Atas suatu wilayah tertanda KW.96AGP047 terletak di Kabupaten
Kutai, Propinsi Kalimantan Timur, seluas 4.637,00 (empat ribu
enam ratus tiga puluh tujuh) hektar.
Dengan penjelasan batas wilayah dan Peta Kuasa Pertambangan
sebagaimana tercantum pada lampiran I untuk mengadakan
penyelidikan umum dengan memenuhi kewajiban-kewajiban
tersebut dalam lampiran II Keputusan ini serta ketentuan
peraturan perundang-undangan yang berlaku.
KEDUA : Kuasa Pertambang ini tidak tidak dapat di perpanjang dan
dapat dibatalkan walaupun masa berlakunya belum habis,
apabila Pemegang Kuasa Pertambang tidak memnuhi
kewajiban-kewajiban yang tercantum di dalam lampiran II
Keputusan ini dan ketentuan peraturan perundang-undangan yang
berlaku.
<PAGE> 21
[TRANSLATION NOT CURRENTLY AVAILABLE, BUT WILL BE PROVIDED BY AMENDMENT.]
KETIGA : Pemegang Kuasa Pertambangan yang bermaksud mengadakan
kerjasama dengan pihak modal asing dalam rangka Perjanjian
Karya terlebih dahulu harus memperoleh izin tertulis dari
Menteri Pertambangan dan Energi cq. Direktur Jenderal
Pertambangan Umum.
KEEMPAT : Keputusan Direktur Jenderal ini mulai berlaku pada tanggal
diterapkan.
DITETAPKAN DI JAKARTA
PADA TANGGAL
16 SEPTEMBER 1996
DIREKTUR JENDERAL PERTAMBANGAN UMUM
[SEAL]
KUNTORO MANGKUSUBROTO
TEMBUSAN:
1. Menteri Pertambangan dan Energi di Jakarta (dengan peta);
2. Menteri Kehutanan di Jakarta (dengan peta).;
3. Menteri Negara Penggerak Dana Investasi/Ketua Badan Koordinasi Penanaman
Modal di Jakarta (tanpa peta);
4. Menteri Negara Agraria Kepala Badan Pertanahan Nasional di Jakarta (dengan
peta);
5. Sekretaris Jenderal Departemen Pertambangan dan Energi di Jakarta (dengan
peta);
6. Inspektur Jenderal Departemen Pertambangan dan Energi di Jakarta (dengan
peta);
7. Direktur Jenderal Geologi dan Sumberdaya Mineral up. Direktur Direktorat
Sumberdaya Mineral, J1.Diponegoro No. 57 Bandung (dengan peta);
8. Direktur Jenderal Pemerintahan Umum dan Otonomi Daerah, Departemen Dalam
Negeri di Jakarta (tanpa peta);
9. Direktur Jenderal Perlindungan Hutan dan Pelestarian Alam, Departemen
Kehutanan J1. H. Ir. Juanda No. 9 Bogor (dengan peta);
10. Direktur Jenderal Inventarisasi dan Tataguna Hutan, Departemen Kehutanan di
Jakarta (dengan peta);
11. Kepala Biro Hukum, Sekretariat Jenderal Departemen Pertambangan dan Energi
di Jakarta (dengan peta);
12. Kepalo Biro Keuangan, Sekretariat Jenderal Departemen Pertambangan dan
Energi di Jakarta (dengan peta);
13. Direktur Teknik Pertambangan Umum di Jakarta (dengan peta);
14. Direktur Pembinaan Pengusahaan Pertambangan di Jakarta (dengan peta);
15. Gubermur Kepala Daerah Tingkat I Propinsi Kalimantan Timur di Samarinda
(dengan peta);
16. Kepala Kantor Wilayah Departemen Pertambangan dan Energi di Samarinda
(dengan peta);
17. Kepala Kantor Wilayah Departemen Kehutanan di Samarinda (dengan peta);
18. Bupati Kepala Daerah Tingkat II Kabupaten Kutai di Tenggarong (dengan peta);
<PAGE> 22
[TRANSLATION NOT CURRENTLY AVAILABLE, BUT WILL BE PROVIDED BY AMENDMENT.]
Lampiran I : KEPUTUSAN DIREKTUR JENDERAL PERTAMBANGAN UMUM
Nomor : 422.K/2012/DDJP/1996
Tanggal : 16 September 1996
LAMPIRAN DAFTAR KOORDINAT
Nama Perusahaan : PT. MUARA KOMAN MAS
Lokasi
- - - Propinsi : KALIMANTAN TIMUR
- - - Kabupaten : KUTAI
- - - Kecamatan : -
- - - Kode Wilayah : 96AGP047
Luas : 4.637 HA
<TABLE>
<CAPTION>
=========================================================================
No. Garis Bujur (BT) Garis Lintang
Ti- -----------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
tik 0 ' " 0 ' " LU/LS
- - -------------------------------------------------------------------------
1 116 8 0.0 0 5 0.0 LU
2 116 8 0.0 0 18 30.0 LU
3 116 9 0.0 0 18 30.0 LU
4 116 9 0.0 0 5 0.0 LU
=========================================================================
</TABLE>
Direktur Jenderal Pertambangan Umum
[SEAL]
Kuntoro Mangkusubroto
<PAGE> 23
[TRANSLATION NOT CURRENTLY AVAILABLE, BUT WILL BE PROVIDED BY AMENDMENT.]
[A MAP OF
KAB. KUTAI
PROP. KALIMANTAN TIMUR]
<PAGE> 24
[TRANSLATION NOT CURRENTLY AVAILABLE, BUT WILL BE PROVIDED BY AMENDMENT.]
Lampiran II : Keputusan Direktur Jenderal Pertambangan Umum
Nomor : 422.K/2012/DDJP/1996
Tanggal : 16 September 1996
KEWAJIBAN-KEWAJIBAN PEMEGANG KUASA PERTAMBANGAN PENYELIDIKAN UMUM
I. Pemegang Kuasa Pertambangan ini telah memilih tempat tinggal (domisili)
pada pengadilan Negeri yang berkududukan di Ibukota Propinsi Kalimantan
Timur di Samarinda.
II. Sebelum melakukan kegiatan, pemegang Kuasa Pertambangan ini harus lebih
dahulu memberitahukan kepada Pemerintah Daerah Propinsi Kalimantan Timur
di Samarinda.
III. Hubungan antara pemegang Kuasa Pertambanga dengag pemilik tanah dan
pihak ketiga diatur menurut ketentuan-ketentuan yang berlaku.
IV. Pemegang Kuasu Pertambangan Penyelidikan Umum diwagibkan membayar Iuran
Tetap menurut ketentuan-ketentuan yang berlaku dan harus dilunasi
sebelum berakhirnya Kuasa Pertambangan.
V. Jika terjadi pertindihan Wilayah Kuasa Pertambangan dengan kepentingan
lahan lainnya, maka pemegang Kuasa Pertambangan sebelum melaksanakan
kegiatan dalam wilayah tersebut harus lebih dahulu menyelesaikannya
sesuai dengan ketentuan yang berlaku.
VI. Pemegang Kuasa Pertambangan harus memberikan laporan kegiatan 3 (tiga)
bulan sekali kepada Direktur Jenderal Pertambangan Umum (1 expl) dan
tembusannya disampaikan kepada Direktur Teknik Pertambangan Umum (3
expl), Kepala Kantor Wilayah Departemen Pertambangan dan Energi di
Samarinda (1 expl), Gubernur dan Bupati Kepala Daerah setempat
(masing-masing 1 expl) paling lambat 10 (sepuluh) hari setelah
berakhirnya triwulan.
VII. Dalam tempo 15 (lima belas) hari setelah keluarnya Keputusan ini,
pemegang Kuasa Pertambangan wajib menyerahkan Rencana Kerja dan Rencana
Pembiayaan untuk daerah yang dimaksud dalam Keputusan ini.
VIII. Pemegang Kuasa Pertambangan diwajibkan memberikan fasilitas jalan atua
fasilitas lainnya kepada pemegang Kuasa Pertambangan lain apabila
diperlukan sesuai dengan kesepakatan.
IX. Dalam Bidang Pengawasan
a. Pemegang Kuasa Pertambangan harus mengindahkan/mentaati peraturan
yang perlaku mengenai Pengawasan Keselamatan dan Kesehatan Kerja
serta Lingkungan di bidang Pertambangan Umum.
b. Pengawasan atas pelaksanaan Kuasa Pertambangan ini kilakukan oleh
Pelaksana Inspeksi Tambang dan/atua petugas yang ditunjuk.
c. Pemegang Kuasa Pertambangan dapat meminta kepada petugas tersebut
untuk memberlihatkan surat-surat pengenal dan surat-surat tugasnya.
<PAGE> 25
[TRANSLATION NOT CURRENTLY AVAILABLE, BUT WILL BE PROVIDED BY AMENDMENT.]
X. a. Permohonan Kuasa Pertambangan Eksplorasi sebagai peningkatan Kuasa
Pertambangan Penyelidikan Umum harus diajukan 3 (tiga) bulan sebelum
berakhirnya masa izin ini kepada Direktur Jenderal Pertambangan
Umum.
b. Atas Kelalaian tersebut pada huruf a, mengakibatkan:
1. Kuasa Pertambangan berakhir menurut hukum dan segala usaha
pertambangan harus dihentikan
2. Selambat-lambatnya dalam waktu 6 (enam) bulan sejak tanggal
berakhirnya Keputusan ini, pemegang Kuasa Pertambangan
mengangkat keluar segala sesuatu yang menjadi milliknya kecuali
benda - benda/bangunan - bangunan yand dipergunakan untuk
kepentingan umum.
Direktur Jenderal Pertambangan Umum
[SEAL]
Kuntoro Mangkusubroto
<PAGE> 26
[TRANSLATION NOT CURRENTLY AVAILABLE, BUT WILL BE PROVIDED BY AMENDMENT.]
DEPARTMEN PERTAMBANGAN DAN ENERGI REPUBLIK INDONESIA
DIREKTORAT JENDERAL PERTAMBANGAN UMUM
KEPUTUSAN DIREKTUR JENDERAL PERTAMBANGAN UMUM
NOMOR: 2193.K/2013/DDJP/1993
TENTANG
PEMBERIAN PERPANJANGAN KEDUA DUASA PERTAMBANGAN
EKSPLORASI (DU. 875/RIAU)
DIREKTUR JENDERAL PERTAMBANGAN UMUM
Membaca : Surat permohonan Ny.Yudith Djamal
tanggal 30 Agustus 1993
Menimbang : bahwa dalam rangka persiapan ke arah Eksploitasi dipandang
perlu memberikan perpanjangan masa berlakunya Kuasa
Pertambangan Eksplorasi.
Mengingat : 1. Undang-undang No. 11 Tahun 1967 (LNRI Th 1967 No. 22,
TLNRI No. 2831).
2. Peraturan Pemerintah No. 32 Tahun 1969 (LNRI Th 1969 No.
60, TLNRI No. 2916) jo. Peraturan Pemerintah No. 79
Tahun 1992 (LNRI Th 1992 No. 129, TLNRI No. 3510).
3. Peraturan Pemerintah No. 27 Tahun 1980 (LNRI th 19380
No. 47 TLNRI No. 3174).
4. Keputusan Presiden R.I. No. 343/M Tahun 1993 Tanggal 11
September 1993.
5. Keputusan Menteri Pertambangan dan Energi
No. 2027 K/201/M.PE/1985 tanggal 18 September 1985.
6. Keputusan Direktur Jenderal Pertambangan Umum
No. 667 K/201/040000/1986 tanggal 11 Nopember 1986.
7. Keputusan Direktur Jenderal Pertambangan Umum
No. 399 K/2013/DDJP/92 tanggal 6 Nopember 1992.
Memberhatikan : Surat Drektur Direktorat Teknik Pertambangan Umum tanggal 26
Oktober 1993 Nomor: 2981/22/DPT/1993
MEMUTUSKAN
Menetapkan :
PERTAMA : Memberikan Perpanhangan Kedua Kuasa Pertambangan Eksplorasi
(DU. 875/Riau)
Kepada : Ny.Yudith Djamal
Alamat : Jl. Kayu Putih Tengah I D/3 A, Pulomas Jakarta
untuk selama 1 (satu) tahun yang berladu mulai tanggal 11
Agustus 1993 sampai dengan tanggal 11 Agustus 1994 dengang
luas dan penjelasan batas serta detentuan-detentuan yang sama
seperti tercantum dalam Keputusand Direktur Pertambangan Umum
No. 748 K/2013/DDJP/89 tanggal 11 Agustus 1989.
<PAGE> 27
[TRANSLATION NOT CURRENTLY AVAILABLE, BUT WILL BE PROVIDED BY AMENDMENT.]
KEDUA : Keputusan Direktur Jenderal ini mulai berlaku pada tanggal
ditetapkan dan mempunyai daya surut sejak tanggal 11 Agustus 1993.
Ditetapkan di : Jakarta
Pada tanggal : 14 Desember 1993
DIREKTUR JENDERAL PERTAMBANGAN UMUM
[SEAL]
KUNTORO MANGKUSUBROTO
TEMBUSAN:
1. Menteri Pertambangan dan Energi di Jakarta
2. Menteri Kehutanan di Jakarta.
3. Menteri Negara Agraria/Kepala Badan Pertanahan Nasional di Jakarta.
4. Sekretaris Jenderal Departemen Pertambangan dan Energi di Jakarta.
5. Inspektur Jenderal Departemen Pertambangan dan Energi di Jakarta.
6. Direktur Jenderal Geologi dan Sumberdaya Mineral up. Direktur
Direktorat Sumberdaya Mineral, J1n. Diponegoro No.57 Bandung.
7. Direktur Jenderal Pemerintahan Umum dan Otonomi Daerah, Departemen
Dalam Negeri di Jakarta.
8. Direktur Jenderal Perlindungan Hutan dan Pelestarian Alam,
Departemen Kehutanan, J1.Ir.H.Juanda No.9, Bogor.
9. Kepala Biro Hukum, Sekretariat Janderal Departemen Pertambangan dan
Energi di Jakarta.
10. Kepala Biro Keuangan, Sekretariat Jenderal Departemen Pertambangan
dan Energi di Jakarta.
11. Direktur Direktorat Teknik Pertambangan Umum di Jakarta.
12. Kirektur Kirektorat Pembinaan Pengusahaan Pertambangan di Jakarta.
13. Gubernur Kepala Daerah Tingkat I Propinsi Riau.
14. Kepala Mantor Wilayah Departemen Pertambangan dan Energi di
Pekanbaru.
15. Bupati Kepala Daerah Tinghat II Kabupaten Indragiri Hulu.
<PAGE> 28
[TRANSLATION NOT CURRENTLY AVAILABLE, BUT WILL BE PROVIDED BY AMENDMENT.]
DEPARTMEN PERTAMBANGAN DAN ENERGI REPUBLIK INDONESIA
DIREKTORAT JENDERAL PERTAMBANGAN UMUM
KEPUTUSAN DIREKTUR JENDERAL PERTAMBANGAN UMUM
NOMOR: 2192.K/2013/DDJP/1993
TENTANG
PEMBERIAN PERPANJANGAN KEDUA DUASA PERTAMBANGAN
EKSPLORASI (DU. 872/RIAU)
DIREKTUR JENDERAL PERTAMBANGAN UMUM
Membaca : Surat permohonan Ny.Yudith Djamal
tanggal 30 Agustus 1993
Menimbang : bahwa dalam rangka persiapan ke arah Eksploitasi dipandang
perlu memberikan perpanjangan masa berlakunya Kuasa
Pertambangan Eksplorasi.
Mengingat : 1. Undang-undang No. 11 Tahun 1967 (LNRI Th 1967 No. 22,
TLNRI No. 2831).
2. Peraturan Pemerintah No.32 Tahun 1969 (LNRI Th 1969 No.
60, TLNRI No. 2916) jo. Peraturan Pemerintah No. 79
Tahun 1992 (LNRI Th 1992 No. 129, TLNRI No. 3510).
3. Peraturan Pemerintah No. 27 Tahun 1980 (LNRI th 19380
No. 47 TLNRI No. 3174).
4. Keputusan Presiden R.I. No. 343/M Tahun 1993 Tanggal 11
September 1993.
5. Keputusan Menteri Pertambangan dan Energi
No. 2027 K/201/M.PE/1985 tanggal 18 September 1985.
6. Keputusan Direktur Jenderal Pertambangan Umum
No. 667 K/201/040000/1986 tanggal 11 Nopember 1986.
7. Keputusan Direktur Jenderal Pertambangan Umum
No. 398 K/2013/DDJP/92 tanggal 6 Nopember 1992.
Memberhatikan : Surat Drektur Direktorat Teknik Pertambangan Umum tanggal 26
Oktober 1993 Nomor: 2981/22/DPT/1993
MEMUTUSKAN
Menetapkan :
PERTAMA : Memberikan Perpanhangan Kedua Kuasa Pertambangan Eksplorasi
(DU. 872/Riau)
Kepada : Ny.Yudith Djamal
Alamat : Jl. Kayu Putih Tengah I D/r A, Pulomas Jakarta
untuk selama 1 (satu) tahun yang berladu mulai tanggal 11
Agustus 1993 sampai dengan tanggal 11 Agustus 1994 dengang
luas dan penjelasan batas serta detentuan-detentuan yang sama
seperti tercantum dalam Keputusand Direktur Pertambangan Umum
No. 746 K/2013/DDJP/89 tanggal 11 Agustus 1989.
<PAGE> 29
[TRANSLATION NOT CURRENTLY AVAILABLE, BUT WILL BE PROVIDED BY AMENDMENT.]
KEDUA : Keputusan Direktur Jenderal ini mulai berlaku pada tanggal
ditetapkan dan mempunyai daya surut sejak tanggal 11 Agustus 1993.
Ditetapkan di : Jakarta
Pada tanggal : 14 Desember 1993
DIREKTUR JENDERAL PERTAMBANGAN UMUM
[SEAL]
KUNTORO MANGKUSUBROTO
TEMBUSAN:
1. Menteri Pertambangan dan Energi di Jakarta
2. Menteri Kehutanan di Jakarta.
3. Menteri Negara Agraria/Kepala Badan Pertanahan Nasional di Jakarta.
4. Sekretaris Jenderal Departemen Pertambangan dan Energi di Jakarta.
5. Inspektur Jenderal Departemen Pertambangan dan Energi di Jakarta.
6. Direktur Jenderal Geologi dan Sumberdaya Mineral up. Direktur
Direktorat Sumberdaya Mineral, J1n. Diponegoro No.57 Bandung.
7. Direktur Jenderal Pemerintahan Umum dan Otonomi Daerah, Departemen
Dalam Negeri di Jakarta.
8. Direktur Jenderal Perlindungan Hutan dan Pelestarian Alam,
Departemen Kehutanan, J1.Ir.H.Juanda No.9, Bogor.
9. Kepala Biro Hukum, Sekretariat Janderal Departemen Pertambangan dan
Energi di Jakarta.
10. Kepala Biro Keuangan, Sekretariat Jenderal Departemen Pertambangan
dan Energi di Jakarta.
11. Direktur Direktorat Teknik Pertambangan Umum di Jakarta.
12. Kirektur Kirektorat Pembinaan Pengusahaan Pertambangan di Jakarta.
13. Gubernur Kepala Daerah Tingkat I Propinsi Riau.
14. Kepala Mantor Wilayah Departemen Pertambangan dan Energi di
Pekanbaru.
15. Bupati Kepala Daerah Tinghat II Kabupaten Indragiri Hulu.
<PAGE> 30
[TRANSLATION NOT CURRENTLY AVAILABLE, BUT WILL BE PROVIDED BY AMENDMENT.]
DEPARTEMEN PERTAMBANGAN DAN ENERGI REPUPLIK INDONESIA
DIREKTORAT JENDERAL PERTAMBANGAN UMUM
KEPUTUSAN DIREKTUR JENDERAL PERTAMBANGAN UMUM
NOMOR : 320.K/2013/DDJP/1994
TENTANG
PEMBERIAN KUASA PERTAMBANGAN EKSPLORASI
( DU. 998/RIAU )
DIREKTUR JENDERAL PERTAMBANGAN UMUM
Membaca : Surat permohonan PT. AKSARA TAMA PRAMITA tanggal 10 Mei 1993.
Menimbang : bahwa permohonan yang bersangkutan telah memenuhi
syarat-syarat sepbagaimana ditentukan dalam peraturan
perundang-undangan yang berlaku.
Mengingat : 1. Undang-undang No. 11 Tahun 1967 (LNRI Th 1967 No. 22,
TLNRI No. 2831).
2. Peraturan Pemerintah No. 32 Tahun 1969 (LNRI Th 1969 No.
60, TLNRI No. 2916) jo. Peraturan Permintah No. 79
Tahun 1992 ( LNRI Th 1992 No. 130, TLNRI No. 3510 ).
3. Peraturan Pemerintah No.27 Tahun 1980 (LNRI Th 1980 No.
47, TLNRI No. 3174).
4. Keputusan Presiden R.I. No. 343/M Tahun 1993 tanggal 11
September 1993.
5. Keputusan Menteri Pertambangan dan Enegi No. 2027
K/201/M.PE/1985 tanggal 18 September 1985.
6. Keputusan Direktur Jenderal Pertambangan Umum No. 667
K/201/040000/1986 tanggal 11 Nopember 1986.
Memperhatikan : Surat Direktur Direktorat Teknik Pertambangan Umum tanggal
31 Mei 1994 Nomor : 1446/2013/DPT/1994.
M E M U T U S K A N
Menetapkan :
PERTAMA : Memberikan Kuasa Pertambangan Eksplorasi untuk jangka waktu 3
(tiga) tahun berturut-turut :
Kepada : PT. AKSARA TAMA PRAMITA
Alamat : J1. cengkeh No. 21 F-G
Jakarta Kota.
atas suatu wilayah tertanda DU. 998/Riau
terletak di : Kabupaten Indragiri Hulu, Propinsi Riau.
seluas : 2.000 (dua ribu) hektar
dengan penjelasan batas wilayah seperti tercantum dalam
lampiran I yang ditanda tangani oleh Direktur Direktorat
Teknik Pertambangan Umum dan peta wilayah Kuasa Pertambangan
dalam lampiran II untuk mengadakan eksplorasi mencari bahan
galian " emas dan mineral pengikutnya " dengan
memenuhi kewajiban-kewajiban tersebut dalam lampiran III
Keputusan ini serta ketentuan peraturan perundang-undangan
yang berlaku.
KEDUA : Kuasa Pertambangan ini dapat dibatalkan walaupun masa
berlakunya belum habis, apabila Pemegang Kuasa Pertambangan
tidak memenuhi kewajiban-kewajiban yang tercantum di dalam
lampiran III Keputusan in dan ketentuan peraturan perundang-
undangan yang berlaku.
<PAGE> 31
[TRANSLATION NOT CURRENTLY AVAILABLE, BUT WILL BE PROVIDED BY AMENDMENT.]
KETIGA : Pemegang Kuasa Pertambangan yang bermaksud mengadakan
kerja sama dengan pihak modal asing dalam rangka Perjanjian
Karya terlebih dahulu harus memperoleh izin tertulis dari
Menteri Pertambangan dan Energi cq. Direktur Jenderal
Pertambangan Umum.
KEEMPAT : Keputusan Direktur Jenderal ini mulai berlaku pada tanggal
ditetapkan.
Ditetapkan di : JAKARTA
pada tanggal : 21 Oktober 1994
DIREKTUR JENDERAL PERTAMBANGAN UMUM
[SEAL]
KUNTORO MANGKUSUBROTO
TEMBUSAN:
1. Menteri Pertambangan dan energi di Jakarta (dengan peta).
2. Menteri Kehutanan di Jakarta (dengan peta).
3. Menteri Negara Penggerak Dana Investasi/Ketua Badan Koordinasi Penanaman
Modal di Jakarta (tanpa peta).
4. Menteri Negara Agaria/Kepala Badan Pertanahan Nasional di Jakarta (dengan
peta);
5. Sekretaris Jenderal Departemen Pertambangan dan Energi di Jakarta (dengan
peta);
6. Inspektur Jenderal Departemen Pertambangan dan Energi di Jakarta (tanpa
peta);
7. Direktur Jenderal Geologi dan Sumberdaya Mineral up. Direktur Direktorat
Sumberdaya Mineral, J1. Diponegoro No. 57 Bandung (dengan peta);
8. Direktur Jenderal Pemerintahan Umum dan Otonomi Daerah, Departemen Dalam
Negeri di Jakarta (tanpa peta);
9. Direktur Jenderal Perlindungan Hutan dan Pelestarian alam, Departemen
Kehutanan J1.Ir.H. Juana No. 9 Bogor (dengan peta);
10. Direktur Jenderal Inventarisasi dan Tataguna Hutan, Departemen Kehutanan di
Jakarta (dengan peta);
11. Kepala Biro Hukum Departemen Pertambangan dan Energi di Jakarta (dengan
peta);
12. Kepala Biro Keuangan, Departemen Petambangan dan Energi di Jakarta (tanpa
peta);
13. Direktur Teknik Teknik Pertambangan Umum di Jakarta (dengan peta);
14. Direktur Direktorat Pembinaan Pengusahaan Pertambangan di Jakarta (dengan
peta);
15. Gubernur Kepala Daerah Tingkat I Propinsi Riau (dengan peta);
16. Kepala Kantor Wilayah Departemen Pertabangan dan Energi di Pekanbaru
(dengan peta);
17. Kepala Kantor Wilayah Departemen Kehutanan di Pekanbaru (dengan peta);
18. Bupati Kepala Daerah Tingkat II Kabupaten Indragiri Hulu (dengan peta);
<PAGE> 32
[TRANSLATION NOT CURRENTLY AVAILABLE, BUT WILL BE PROVIDED BY AMENDMENT.]
Lampiran I : Keputusan Direktur Jenderal Pertambangan Umum
Nomor : 320.K/2013/DDJP/1994
Tanggal : 21 Oktober 1994
PENJULASAN BATAS WILAYAH KUASA PERTAMBANGAN EKSPLORASI
(D.U. 998 / RIAU)
Sebelah Utara dan : masing-masing garis sejajar terletak pada 3,000 meter di
sebelah Selatan sebelah Utara dan 2,000 meter di sebelah Selatan titik
Triangulasi 111.
Sebelah Timur dan : masing-masing garis rembang terletak pada 7,000 meter
sebelah Barat dan 3,000 meter di sebelah Timur titik tersebut di atas.
Direktur Directorat Teknik Pertambangan Umum
[SEAL]
Ir. Soelendro As
NIP. 100002158.
<PAGE> 33
[TRANSLATION NOT CURRENTLY AVAILABLE, BUT WILL BE PROVIDED BY AMENDMENT.]
Lampiran III : Keputusan Direktur Jenderal Pertambangan Umum
Nomor : 320.K/2013/DDJP/1994
Tanggal : 21 Oktober 1994
KEWAJIBAN-KEWAJIBAN PEREGANG KUASA PERTAMBANGAN EKSPLORASI
I. Pemegang Kuasa Pertambangan ini telah memilih tempat tinggal (domesili)
pada Pengadilan Negeri yang berkedudukan di ibu kota Propinsi Riau di
Pekanbaru.
II. Sebelum melakukan kegiatan, pemegang Kuasa Pertambangan ini harus lebih
dahulu memberitahukan kepada Pemerintah Daerah dan Kantor Wilayah
Departemen Pertambangan dan Energi di Pekanbaru.
III. Hubungan antara pemegang Kuasa Pertambangan dengan pemilik tanah dan
pihak ketiga, diatur menurut ketentuan-ketentuan yang berlaku.
IV. Pemegang Kuasa Pertambangan Eksplorais diwajibkan membayar Iuran Tetap
dan Iuran Eksplorasi menurut ketentuan yang berlaku dan harus dilunasi
sebelum beraknirnya Kuasa Pertambangan.
V. Jika terjadi pertindihan wilayah Kuasa Pertambangan dengan kepentingan
lahan lainnya, maka pemegang Kuasa Pertambangan sebelum melaksanakan
kagiatan dalam wilayah tersebut harus lebih dahulu menyelesaikannya
sesuai dengan ketentuan yang berlaku.
VI. a. Pemegang Kuasa Pertambangan harus memberikan laporan kegiatan 3
(tiga) bulan sekali kepada Direktur Jenderal Pertambangan Umum (1
expl.) dan tembusannya disampaikan kepada Direktur Direktorat Teknik
Pertambangan Umum (3 expl.), Kepala kantor Wilayah Departemen
Pertambangan dan Energi di Pekanbaru (1 expl.), Gubernur dan Bupati
Kepala Daerah setempat (masing-masing 1 expl.).
b. Selambat-lambatnya dalam waktu 6 (enam) bulan setelah tanggal
ditetapkannya Keputusan ini, Pemegang Kuasa Pertambangan harus sudah
menyampaikan laporan mengenai pematokan batas-batas wilayah Kuasa
Pertambangan tersebut.
VII. Dalam Bidang Pengawasan.
a. Pemegang Kuasa Pertambangan harus mematuhi/mentaati peratruan yang
berlaku mengenai Pengawasan Keselmatan dan Kesehatan Kerja serta
Lingkungan dibidang Pertambangan umum.
b. Pengawasan atas pelaksanaan Kuasa Pertambangan ini dilakukan oleh
Pelaksana Inpeksi Tambang dan/atau petugas yang ditunjuk oleh
Direktur Jenderal Pertambangan Umum.
c. Pemegang Kuasa Pertambangan dapat/diperkenankan meminta kepada
petugas tersebut untuk memperlihatkan surat-surat pengenal dan
surat-surat tugasnya.
VIII. a. Permohonan Perpanjangan atau permohonan Kuasa Pertambangan
Eksploitasi sebegai peningkatan harus kiajukan 3 (tiga) bulan sebelum
berakhirnya masa izin ini dengan desertai bukti-bukti kewajiban yang
telah dipenuhi.
b. Atas kelalaian tersebut pada huruf a, mengakibatkan:
1. Kuasa Pertambangan berakhir menurut hukum dan segala usaha
pertambangan harus dihentikan.
2. Sealmbat-lambatnya dalam watku 6 (enam) bulan sejak tanggal
berkahirnya Keputusan ini, pemegang Kuasa Pertambangan mengangkat
keluar segala sesuatu yang menjadi milikanya kecuali benda-benda/
bangunan-bangunan yang dipergunakan untuk kepentingan umum.
DIREKTUR JENDERAL PERTAMBANGAN UMUM
[SEAL]
KONTORO MANGKUSUBROTO
<PAGE> 34
[TRANSLATION NOT CURRENTLY AVAILABLE, BUT WILL BE PROVIDED BY AMENDMENT.]
DEPARTEMEN PERTAMBANGAN DAN ENERGI REPUPLIK INDONESIA
DIREKTORAT JENDERAL PERTAMBANGAN UMUM
KEPUTUSAN DIREKTUR JENDERAL PERTAMBANGAN UMUM
NOMOR : 321.K/2013/DDJP/1994
TENTANG
PEMBERIAN KUASA PERTAMBANGAN EKSPLORASI
( DU. 999/RIAU )
DIREKTUR JENDERAL PERTAMBANGAN UMUM
Membaca : Surat permohonan PT. AKSARA TAMA PRAMITA tanggal 10 Mei 1993.
Menimbang : bahwa permohonan yang bersangkutan telah memenuhi
syarat-syarat sepbagaimana ditentukan dalam peraturan
perundang-undangan yang berlaku.
Mengingat : 1. Undang-undang No. 11 Tahun 1967 (LNRI Th 1967 No. 22,
TLNRI No. 2831).
2. Peraturan Pemerintah No. 32 Tahun 1969 (LNRI Th 1969 No.
60, TLNRI No. 2916) jo. Peraturan Permintah No. 79
Tahun 1992 ( LNRI Th 1992 No. 130, TLNRI No. 3510 ).
3. Peraturan Pemerintah No.27 Tahun 1980 (LNRI Th 1980 No.
47, TLNRI No. 3174).
4. Keputusan Presiden R.I. No. 343/M Tahun 1993 tanggal 11
September 1993.
5. Keputusan Menteri Pertambangan dan Enegi No. 2027
K/201/M.PE/1985 tanggal 18 September 1985.
6. Keputusan Direktur Jenderal Pertambangan Umum No. 667
K/201/040000/1986 tanggal 11 Nopember 1986.
Memperhatikan : Surat Direktur Direktorat Teknik Pertambangan Umum tanggal
31 Mei 1994 Nomor : 1446/2013/DPT/1994.
M E M U T U S K A N
Menetapkan :
PERTAMA : Memberikan Kuasa Pertambangan Eksplorasi untuk jangka waktu 3
(tiga) tahun berturut-turut :
Kepada : PT. AKSARA TAMA PRAMITA
Alamat : J1. Cengkeh No. 21 F-G
Jakarta Kota.
atas suatu wilayah tertanda DU. 998/Riau
terletak di : Kabupaten Indragiri Hulu, Propinsi Riau.
seluas : 1.850 (seribu delapan ratus lima pulah)
hektar
dengan penjelasan batas wilayah seperti tercantum dalam
lampiran I yang ditanda tangani oleh Direktur Direktorat
Teknik Pertambangan Umum dan peta wilayah Kuasa Pertambangan
dalam lampiran II untuk mengadakan eksplorasi mencari bahan
galian " emas dan mineral pengikutnya " dengan
memenuhi kewajiban-kewajiban tersebut dalam lampiran III
Keputusan ini serta ketentuan peraturan perundang-undangan
yang berlaku.
KEDUA : Kuasa Pertambangan ini dapat dibatalkan walaupun masa
berlakunya belum habis, apabila Pemegang Kuasa Pertambangan
tidak memenuhi kewajiban-kewajiban yang tercantum di dalam
lampiran III Keputusan in dan ketentuan peraturan perundang-
undangan yang berlaku.
<PAGE> 35
[TRANSLATION NOT CURRENTLY AVAILABLE, BUT WILL BE PROVIDED BY AMENDMENT.]
KETIGA : Pemegang Kuasa Pertambangan yang bermaksud mengadakan kerja
sama dengang pihak modal asing dalam rangka Perjanjian Karya
terlebih dahulu harus memperoleh izin tertulis dari Merteri
Pertambangan dan Energi cq. Direktur Jenderal Pertambangan
Umum.
KEEMPAT : Keputusan Direktur Jenderal ini mulai berlaku pada tanggal
ditetapkan.
Ditetapkan di : JAKARTA
Pada Tanggal : 21 Oktober 1994
DIREKTUR JENDERAL PERTAMBANGAN UMUM
[SEAL]
KUNTORO MANGKUSUBROTO
TEMBUSAN :
1. Menteri Pertambangan dan Energi di Jakarta (dengan peta).
2. Menteri Kehutanan di Jakarta (dengan peta).
3. Menteri Negara Penggerak Dana Investasi/Ketua Badan Koordinasi Penanaman
Modal di Jakarta (tanpa peta).
4. Menteri Negara Agraria/Kepala badan Pertanahan Nasional di Jakarta
(dengan peta).
5. Sekretaris Jenderal Departemen Pertambangan dan Energi di Jakarta (dengan
peta).
6. Inspektur jenderal Departemen Pertambangan dan Energi di Jakarta (tanpa
peta).
7. Direktur Jenderal Geologi dan Sumberdaya Mineral up. Direktur Direktorat
Sumberdaya Mineral, Jl.Diponegoro No.57 Bandung (dengan peta).
8. Direktur Jenderal Pemerintahan Umum dan Otonomi Daerah, Departemen Dalam
Negeri di Jakarta (tanpa peta).
9. Direktur Jenderal Perlindungan Hutan dan Pelestarian Alam, Departemen
Kehutanan Jl.Ir.H.Juandan No.9 Bogor (dengan peta).
10. Direktur Jenderal Inventarisasi dan Tataguna Hutan, Departemen Kehutanan
di Jakarta (dengan peta).
11. Kepala Biro Hukum, Departemen Pertambangan dan Energi di Jakarta (dengan
peta).
12. Kepala Biro Keuangan, Departemen Pertambangan dan Energi di Jakarta (tanpa
peta).
13. Direktur Direktorat Teknik Pertambangan Umum di Jakarta (dengan peta).
14. Direktur Direktorat Pembinaan Pengusahaan Pertambangan di Jarkata (dengen
peta).
15. Gubernur Kepala Dareah Tingkat I Propinsi Riau (dengan peta).
16. Kepala Kanto Wilayah Departemen Pertambangan dan Energi di Pekanbaru
(dengan peta).
17. Kepala Kantor Wilayah Departemen Kehutanan di Pekanbaru (dengan peta).
18. Bupati Keplal Daerah Tingkat II Kabupaten Indragiri Hulu (dengan peta).
<PAGE> 36
[TRANSLATION NOT CURRENTLY AVAILABLE, BUT WILL BE PROVIDED BY AMENDMENT.]
Lampiran I : Keputusan Direktur Jenderal Pertambangan Umum
Nomor : 321.K/2013/DDJP/1994
Tanggal : 21 Oktober 1994
PENJELASAN BATAS WILAYAH KUASA PERTAMBANGAN EKSPLORASI
( D.U. 999 / RIAU )
Sebelah Utara : garis sejajar terletak pada 2.000 meter di sebelah Selata
titik Triangulasi 111.
Sebelah Timur : a. garis rembang terletak pada 7.000 meter di sebelah Timur
titik tersebut di atas
b. garis sejajar terletak pada 3.250 meter di sebelah
Selatan titik tersebut di atas.
c. garis rembang terletak pada 6.000 meter di sebelah Timur
titik tersebut di atas.
d. garis sejajar terletak pada 4.750 meter di sebelah
Selatan titik tersebut di atas.
e. garis rembang terletak pada 7.000 meter di sebelah Timur
titik tersebut di atas.
Sebelah Selatan : garis sejajar terletak pada 7.000 meter di sebelah Selatan
titik tersebut di atas.
Sebelah Barat : garis rembang terletak pada 3.000 meter di sebelah Timur
titik tersebut di atas.
DIREKTUR DIREKTOR AT TEKNIK PERTAMBANGAN UMUM
[SEAL]
IR. SOELENDRO AS
NIP 100002158.
<PAGE> 37
[TRANSLATION NOT CURRENTLY AVAILABLE, BUT WILL BE PROVIDED BY AMENDMENT.]
[THIS IS A MAP OF
LAMPLHAN II KEPUTUSAN DIRJEN PERTAMBANGAN UMUM]
<PAGE> 38
[TRANSLATION NOT CURRENTLY AVAILABLE, BUT WILL BE PROVIDED BY AMENDMENT.]
Lampiran III : Keputusan Direktur Jenderal Pertambangan Umum
Nomor : 321.K/2013/DDJP/1994
Tanggal : 21 Oktober 1994
KEWAJIBAN-KEWAJIBAN PEREGANG KUASA PERTAMBANGAN EKSPLORASI
I. Pemegang Kuasa Pertambangan ini telah memilih tempat tinggal (domesili)
pada Pengadilan Negeri yang berkedudukan di ibu kota Propinsi Riau di
Pekanbaru.
II. Sebelum melakukan kegiatan, pemegang Kuasa Pertambangan ini harus lebih
dahulu memberitahukan kepada Pemerintah Daerah dan Kantor Wilayah
Departemen Pertambangan dan Energi di Pekanbaru.
III. Hubungan antara pemegang Kuasa Pertambangan dengan pemilik tanah dan
pihak ketiga, diatur menurut ketentuan-ketentuan yang berlaku.
IV. Pemegang Kuasa Pertambangan Eksplorais diwajibkan membayar Iuran Tetap
dan Iuran Eksplorasi menurut ketentuan yang berlaku dan harus dilunasi
sebelum beraknirnya Kuasa Pertambangan.
V. Jika terjadi pertindihan wilayah Kuasa Pertambangan dengan kepentingan
lahan lainnya, maka pemegang Kuasa Pertambangan sebelum melaksanakan
kagiatan dalam wilayah tersebut harus lebih dahulu menyelesaikannya
sesuai dengan ketentuan yang berlaku.
VI. a. Pemegang Kuasa Pertambangan harus memberikan laporan kegiatan 3
(tiga) bulan sekali kepada Direktur Jenderal Pertambangan Umum (1
expl.) dan tembusannya disampaikan kepada Direktur Direktorat Teknik
Pertambangan Umum (3 expl.), Kepala kantor Wilayah Departemen
Pertambangan dan Energi di Pekanbaru (1 expl.), Gubernur dan Bupati
Kepala Daerah setempat (masing-masing 1 expl.).
b. Selambat-lambatnya dalam waktu 6 (enam) bulan setelah tanggal
ditetapkannya Keputusan ini, Pemegang Kuasa Pertambangan harus sudah
menyampaikan laporan mengenai pematokan batas-batas wilayah Kuasa
Pertambangan tersebut.
VII. Dalam Bidang Pengawasan.
a. Pemegang Kuasa Pertambangan harus mematuhi/mentaati peratruan yang
berlaku mengenai Pengawasan Keselmatan dan Kesehatan Kerja serta
Lingkungan dibidang Pertambangan umum.
b. Pengawasan atas pelaksanaan Kuasa Pertambangan ini dilakukan oleh
Pelaksana Inpeksi Tambang dan/atau petugas yang ditunjuk oleh
Direktur Jenderal Pertambangan Umum.
c. Pemegang Kuasa Pertambangan dapat/diperkenankan meminta kepada
petugas tersebut untuk memperlihatkan surat-surat pengenal dan
surat-surat tugasnya.
VIII. a. Permohonan Perpanjangan atau permohonan Kuasa Pertambangan
Eksploitasi sebegai peningkatan harus kiajukan 3 (tiga) bulan sebelum
berakhirnya masa izin ini dengan desertai bukti-bukti kewajiban yang
telah dipenuhi.
b. Atas kelalaian tersebut pada huruf a, mengakibatkan:
1. Kuasa Pertambangan berakhir menurut hukum dan segala usaha
pertambangan harus dihentikan.
2. Sealmbat-lambatnya dalam watku 6 (enam) bulan sejak tanggal
berkahirnya Keputusan ini, pemegang Kuasa Pertambangan mengangkat
keluar segala sesuatu yang menjadi milikanya kecuali benda-benda/
bangunan-bangunan yang dipergunakan untuk kepentingan umum.
DIREKTUR JENDERAL PERTAMBANGAN UMUM
[SEAL]
KONTORO MANGKUSUBROTO
<PAGE> 39
[TRANSLATION NOT CURRENTLY AVAILABLE, BUT WILL BE PROVIDED BY AMENDMENT.]
DIREKTORAT TEKNIK PERTAMBANGAN UMUM
SUB DIT PELAYANAN USAHA PERTAMBANGAN
JALAN JENDERAL GATOT SUBROTO KAV. 49
J A K A R T A
=============================================================================
JAKARTA, 22 AGUSTUS 1995
KEPADA YTH.
SDR. JUSRI JAMAL, SH/CV. BOLIOHUTU MINING
PERKANTORAN KAYU PUTIH BOLK D NO. 11
J1. KAYU PUTIH VI
JAKARTA TIMUR
S U R A T P E N G A N T A R
Nomor : 291 /20/SD.I/1995
- - -----------------------------------------------------------------------------
NO. PERIHAL BANKAKNYA KETERANGAN
- - -----------------------------------------------------------------------------
1 Keputusan Dirjen Pertambangan 3 buah Disampaikan kepa
Umum: Saudara dengan harapan
No. 226 K s/d 228 K/2012/ agar dapat diterima
DDJP/1995. dan dipergunakan den-
Tgl. 22 Mei 1995 gan baik serta mema-
KP.Penyelidikan Umum tuhi kewajiban sesuai
Du. 362 s/d 364 dengan ketentuan per-
Sulut. undang-undangan yang
berlaku.
DIREKTUR DIREKTORAT TEKNIK
PERTAMBANGAN UMUM
AN. KASUBIT PELAYANAN UASAHA PERTAMBANGAN
KEPALA SEKSI IURAN PERTAMBANG
/s/
DITERIMA OLEH SUNARTOJO, BE
NIP. 100000942
/s/
.................
CAP/NAMA TERANG
Tembusan :
1. Sekretaris Direktorat Jenderal Pertambangan Umum
2. Direktur Direktorat Teknik Pertambangan Umum
<PAGE> 40
[TRANSLATION NOT CURRENTLY AVAILABLE, BUT WILL BE PROVIDED BY AMENDMENT.]
DEPARTEMEN PERTAMBANGAN DAN ENERGI REPUPLIK INDONESIA
DIREKTORAT JENDERAL PERTAMBANGAN UMUM
KEPUTUSAN DIREKTUR JENDERAL PERTAMBANGAN UMUM
NOMOR : 322.K/2013/DDJP/1994
TENTANG
PEMBERIAN KUASA PERTAMBANGAN EKSPLORASI
( DU. 1000/RIAU )
DIREKTUR JENDERAL PERTAMBANGAN UMUM
Membaca : Surat permohonan PT. AKSARA TAMA PRAMITA tanggal 10 Mei 1993.
Menimbang : bahwa permohonan yang bersangkutan telah memenuhi
syarat-syarat sepbagaimana ditentukan dalam peraturan
perundang-undangan yang berlaku.
Mengingat : 1. Undang-undang No. 11 Tahun 1967 (LNRI Th 1967 No. 22,
TLNRI No. 2831).
2. Peraturan Pemerintah No. 32 Tahun 1969 (LNRI Th 1969 No.
60, TLNRI No. 2916) jo. Peraturan Permintah No. 79
Tahun 1992 ( LNRI Th 1992 No. 130, TLNRI No. 3510 ).
3. Peraturan Pemerintah No.27 Tahun 1980 (LNRI Th 1980 No.
47, TLNRI No. 3174).
4. Keputusan Presiden R.I. No. 343/M Tahun 1993 tanggal 11
September 1993.
5. Keputusan Menteri Pertambangan dan Enegi No. 2027
K/201/M.PE/1985 tanggal 18 September 1985.
6. Keputusan Direktur Jenderal Pertambangan Umum No. 667
K/201/040000/1986 tanggal 11 Nopember 1986.
Memperhatikan : Surat Direktur Direktorat Teknik Pertambangan Umum tanggal
31 Mei 1994 Nomor : 1446/2013/DPT/1994.
M E M U T U S K A N
Menetapkan :
PERTAMA : Memberikan Kuasa Pertambangan Eksplorasi untuk jangka waktu 3
(tiga) tahun berturut-turut :
Kepada : PT. AKSARA TAMA PRAMITA
Alamat : J1. Cengkeh No. 21 F-G
Jakarta Kota.
atas suatu wilayah tertanda DU. 998/Riau
terletak di : Kabupaten Indragiri Hulu, Propinsi Riau.
seluas : 1.962,50 (seribu sembilan ratus enam puluh
dua 50/100) hektar
dengan penjelasan batas wilayah seperti tercantum dalam
lampiran I yang ditanda tangani oleh Direktur Direktorat
Teknik Pertambangan Umum dan peta wilayah Kuasa Pertambangan
dalam lampiran II untuk mengadakan eksplorasi mencari bahan
galian " emas dan mineral pengikutnya " dengan
memenuhi kewajiban-kewajiban tersebut dalam lampiran III
Keputusan ini serta ketentuan peraturan perundang-undangan
yang berlaku.
KEDUA : Kuasa Pertambangan ini dapat dibatalkan walaupun masa
berlakunya belum habis, apabila Pemegang Kuasa Pertambangan
tidak memenuhi kewajiban-kewajiban yang tercantum di dalam
lampiran III Keputusan in dan ketentuan peraturan perundang-
undangan yang berlaku.
<PAGE> 41
[TRANSLATION NOT CURRENTLY AVAILABLE, BUT WILL BE PROVIDED BY AMENDMENT.]
KETIGA : Pemegang Kuasa Pertambangan yang bermaksud mengadakan kerja
sama dengang pihak modal asing dalam rangka Perjanjian Karya
terlebih dahulu harus memperoleh izin tertulis dari Merteri
Pertambangan dan Energi cq. Direktur Jenderal Pertambangan
Umum.
KEEMPAT : Keputusan Direktur Jenderal ini mulai berlaku pada tanggal
ditetapkan.
Ditetapkan di : JAKARTA
Pada Tanggal : 21 Oktober 1994
DIREKTUR JENDERAL PERTAMBANGAN UMUM
[SEAL]
KUNTORO MANGKUSUBROTO
TEMBUSAN :
1. Menteri Pertambangan dan Energi di Jakarta (dengan peta).
2. Menteri Kehutanan di Jakarta (dengan peta).
3. Menteri Negara Penggerak Dana Investasi/Ketua Badan Koordinasi Penanaman
Modal di Jakarta (tanpa peta).
4. Menteri Negara Agraria/Kepala badan Pertanahan Nasional di Jakarta
(dengan peta).
5. Sekretaris Jenderal Departemen Pertambangan dan Energi di Jakarta (dengan
peta).
6. Inspektur jenderal Departemen Pertambangan dan Energi di Jakarta (tanpa
peta).
7. Direktur Jenderal Geologi dan Sumberdaya Mineral up. Direktur Direktorat
Sumberdaya Mineral, Jl.Diponegoro No.57 Bandung (dengan peta).
8. Direktur Jenderal Pemerintahan Umum dan Otonomi Daerah, Departemen Dalam
Negeri di Jakarta (tanpa peta).
9. Direktur Jenderal Perlindungan Hutan dan Pelestarian Alam, Departemen
Kehutanan Jl.Ir.H.Juandan No.9 Bogor (dengan peta).
10. Direktur Jenderal Inventarisasi dan Tataguna Hutan, Departemen Kehutanan
di Jakarta (dengan peta).
11. Kepala Biro Hukum, Departemen Pertambangan dan Energi di Jakarta (dengan
peta).
12. Kepala Biro Keuangan, Departemen Pertambangan dan Energi di Jakarta (tanpa
peta).
13. Direktur Direktorat Teknik Pertambangan Umum di Jakarta (dengan peta).
14. Direktur Direktorat Pembinaan Pengusahaan Pertambangan di Jarkata (dengen
peta).
15. Gubernur Kepala Dareah Tingkat I Propinsi Riau (dengan peta).
16. Kepala Kanto Wilayah Departemen Pertambangan dan Energi di Pekanbaru
(dengan peta).
17. Kepala Kantor Wilayah Departemen Kehutanan di Pekanbaru (dengan peta).
18. Bupati Keplal Daerah Tingkat II Kabupaten Indragiri Hulu (dengan peta).
<PAGE> 42
[TRANSLATION NOT CURRENTLY AVAILABLE, BUT WILL BE PROVIDED BY AMENDMENT.]
Lampiran I : Keputusan Direktur Jenderal Pertambangan Umum
Nomor : 322.K/2013/DDJP/1994
Tanggal : 21 Oktober 1994
PENJELASAN BATAS WILAYAH KUASA PERTAMBANGAN EKSPLORASI
( D.U. 1000 / RIAU )
Sebelah Utara : garis sejajar melalui titik Triangulasi 111.
Sebelah Timur : garis rembang terletak pada 12.000 meter di sebelah Timur
titik tersebut di atas.
Sebelah Selatan : a. garis sejajar terletak pada 4.000 meter di sebelah
Selatan titik tersebut di atas.
b. garis rembang terletak pada 7.500 meter di sebelah Timur
titik tersebut di atas.
c. garis sejajar terletak pada 3.250 meter di sebelah
Selatan titik tersebut di atas.
Sebelah Barat : garis rembang terletak pada 7.000 meter di sebelah Timur
titik tersebut di atas.
DIREKTUR DIREKTOR AT TEKNIK PERTAMBANGAN UMUM
[SEAL]
IR. SOELENDRO AS
NIP 100002158.
<PAGE> 43
[TRANSLATION NOT CURRENTLY AVAILABLE, BUT WILL BE PROVIDED BY AMENDMENT.]
[THIS IS A MAP OF
LAMPLHAN II KEPUTUSAN DIRJEN PERTAMBANGAN UMUM]
<PAGE> 44
[TRANSLATION NOT CURRENTLY AVAILABLE, BUT WILL BE PROVIDED BY AMENDMENT.]
Lampiran III : Keputusan Direktur Jenderal Pertambangan Umum
Nomor : 322.K/2013/DDJP/1994
Tanggal : 21 Oktober 1994
KEWAJIBAN-KEWAJIBAN PEREGANG KUASA PERTAMBANGAN EKSPLORASI
I. Pemegang Kuasa Pertambangan ini telah memilih tempat tinggal (domesili)
pada Pengadilan Negeri yang berkedudukan di ibu kota Propinsi Riau di
Pekanbaru.
II. Sebelum melakukan kegiatan, pemegang Kuasa Pertambangan ini harus lebih
dahulu memberitahukan kepada Pemerintah Daerah dan Kantor Wilayah
Departemen Pertambangan dan Energi di Pekanbaru.
III. Hubungan antara pemegang Kuasa Pertambangan dengan pemilik tanah dan
pihak ketiga, diatur menurut ketentuan-ketentuan yang berlaku.
IV. Pemegang Kuasa Pertambangan Eksplorais diwajibkan membayar Iuran Tetap
dan Iuran Eksplorasi menurut ketentuan yang berlaku dan harus dilunasi
sebelum beraknirnya Kuasa Pertambangan.
V. Jika terjadi pertindihan wilayah Kuasa Pertambangan dengan kepentingan
lahan lainnya, maka pemegang Kuasa Pertambangan sebelum melaksanakan
kagiatan dalam wilayah tersebut harus lebih dahulu menyelesaikannya
sesuai dengan ketentuan yang berlaku.
VI. a. Pemegang Kuasa Pertambangan harus memberikan laporan kegiatan 3
(tiga) bulan sekali kepada Direktur Jenderal Pertambangan Umum (1
expl.) dan tembusannya disampaikan kepada Direktur Direktorat Teknik
Pertambangan Umum (3 expl.), Kepala kantor Wilayah Departemen
Pertambangan dan Energi di Pekanbaru (1 expl.), Gubernur dan Bupati
Kepala Daerah setempat (masing-masing 1 expl.).
b. Selambat-lambatnya dalam waktu 6 (enam) bulan setelah tanggal
ditetapkannya Keputusan ini, Pemegang Kuasa Pertambangan harus sudah
menyampaikan laporan mengenai pematokan batas-batas wilayah Kuasa
Pertambangan tersebut.
VII. Dalam Bidang Pengawasan.
a. Pemegang Kuasa Pertambangan harus mematuhi/mentaati peratruan yang
berlaku mengenai Pengawasan Keselmatan dan Kesehatan Kerja serta
Lingkungan dibidang Pertambangan umum.
b. Pengawasan atas pelaksanaan Kuasa Pertambangan ini dilakukan oleh
Pelaksana Inpeksi Tambang dan/atau petugas yang ditunjuk oleh
Direktur Jenderal Pertambangan Umum.
c. Pemegang Kuasa Pertambangan dapat/diperkenankan meminta kepada
petugas tersebut untuk memperlihatkan surat-surat pengenal dan
surat-surat tugasnya.
VIII. a. Permohonan Perpanjangan atau permohonan Kuasa Pertambangan
Eksploitasi sebegai peningkatan harus kiajukan 3 (tiga) bulan sebelum
berakhirnya masa izin ini dengan desertai bukti-bukti kewajiban yang
telah dipenuhi.
b. Atas kelalaian tersebut pada huruf a, mengakibatkan:
1. Kuasa Pertambangan berakhir menurut hukum dan segala usaha
pertambangan harus dihentikan.
2. Sealmbat-lambatnya dalam watku 6 (enam) bulan sejak tanggal
berkahirnya Keputusan ini, pemegang Kuasa Pertambangan mengangkat
keluar segala sesuatu yang menjadi milikanya kecuali benda-benda/
bangunan-bangunan yang dipergunakan untuk kepentingan umum.
DIREKTUR JENDERAL PERTAMBANGAN UMUM
[SEAL]
KONTORO MANGKUSUBROTO
<PAGE> 45
[TRANSLATION NOT CURRENTLY AVAILABLE, BUT WILL BE PROVIDED BY AMENDMENT.]
DEPARTEMEN PERTAMBANGAN DAN ENERGI REPUPLIK INDONESIA
DIREKTORAT JENDERAL PERTAMBANGAN UMUM
KEPUTUSAN DIREKTUR JENDERAL PERTAMBANGAN UMUM
NOMOR : 323.K/2013/DDJP/1994
TENTANG
PEMBERIAN KUASA PERTAMBANGAN EKSPLORASI
( DU. 1001/RIAU )
DIREKTUR JENDERAL PERTAMBANGAN UMUM
Membaca : Surat permohonan PT. AKSARA TAMA PRAMITA tanggal 10 Mei 1993.
Menimbang : bahwa permohonan yang bersangkutan telah memenuhi
syarat-syarat sepbagaimana ditentukan dalam peraturan
perundang-undangan yang berlaku.
Mengingat : 1. Undang-undang No. 11 Tahun 1967 (LNRI Th 1967 No. 22,
TLNRI No. 2831).
2. Peraturan Pemerintah No. 32 Tahun 1969 (LNRI Th 1969 No.
60, TLNRI No. 2916) jo. Peraturan Permintah No. 79
Tahun 1992 ( LNRI Th 1992 No. 130, TLNRI No. 3510 ).
3. Peraturan Pemerintah No.27 Tahun 1980 (LNRI Th 1980 No.
47, TLNRI No. 3174).
4. Keputusan Presiden R.I. No. 343/M Tahun 1993 tanggal 11
September 1993.
5. Keputusan Menteri Pertambangan dan Enegi No. 2027
K/201/M.PE/1985 tanggal 18 September 1985.
6. Keputusan Direktur Jenderal Pertambangan Umum No. 667
K/201/040000/1986 tanggal 11 Nopember 1986.
Memperhatikan : Surat Direktur Direktorat Teknik Pertambangan Umum tanggal
31 Mei 1994 Nomor : 1446/2013/DPT/1994.
M E M U T U S K A N
Menetapkan :
PERTAMA : Memberikan Kuasa Pertambangan Eksplorasi untuk jangka waktu 3
(tiga) tahun berturut-turut :
Kepada : PT. AKSARA TAMA PRAMITA
Alamat : J1. Cengkeh No. 21 F-G
Jakarta Kota.
atas suatu wilayah tertanda DU. 998/Riau
terletak di : Kabupaten Indragiri Hulu, Propinsi Riau.
seluas : 1.962,50 (seribu sembilan ratus enam puluh
dua 50/100) hektar
dengan penjelasan batas wilayah seperti tercantum dalam
lampiran I yang ditanda tangani oleh Direktur Direktorat
Teknik Pertambangan Umum dan peta wilayah Kuasa Pertambangan
dalam lampiran II untuk mengadakan eksplorasi mencari bahan
galian " emas dan mineral pengikutnya " dengan
memenuhi kewajiban-kewajiban tersebut dalam lampiran III
Keputusan ini serta ketentuan peraturan perundang-undangan
yang berlaku.
KEDUA : Kuasa Pertambangan ini dapat dibatalkan walaupun masa
berlakunya belum habis, apabila Pemegang Kuasa Pertambangan
tidak memenuhi kewajiban-kewajiban yang tercantum di dalam
lampiran III Keputusan in dan ketentuan peraturan perundang-
undangan yang berlaku.
<PAGE> 46
[TRANSLATION NOT CURRENTLY AVAILABLE, BUT WILL BE PROVIDED BY AMENDMENT.]
KETIGA : Pemegang Kuasa Pertambangan yang bermaksud mengadakan kerja
sama dengang pihak modal asing dalam rangka Perjanjian Karya
terlebih dahulu harus memperoleh izin tertulis dari Merteri
Pertambangan dan Energi cq. Direktur Jenderal Pertambangan
Umum.
KEEMPAT : Keputusan Direktur Jenderal ini mulai berlaku pada tanggal
ditetapkan.
Ditetapkan di : JAKARTA
Pada Tanggal : 21 Oktober 1994
DIREKTUR JENDERAL PERTAMBANGAN UMUM
[SEAL]
KUNTORO MANGKUSUBROTO
TEMBUSAN :
1. Menteri Pertambangan dan Energi di Jakarta (dengan peta).
2. Menteri Kehutanan di Jakarta (dengan peta).
3. Menteri Negara Penggerak Dana Investasi/Ketua Badan Koordinasi Penanaman
Modal di Jakarta (tanpa peta).
4. Menteri Negara Agraria/Kepala badan Pertanahan Nasional di Jakarta
(dengan peta).
5. Sekretaris Jenderal Departemen Pertambangan dan Energi di Jakarta (dengan
peta).
6. Inspektur jenderal Departemen Pertambangan dan Energi di Jakarta (tanpa
peta).
7. Direktur Jenderal Geologi dan Sumberdaya Mineral up. Direktur Direktorat
Sumberdaya Mineral, Jl.Diponegoro No.57 Bandung (dengan peta).
8. Direktur Jenderal Pemerintahan Umum dan Otonomi Daerah, Departemen Dalam
Negeri di Jakarta (tanpa peta).
9. Direktur Jenderal Perlindungan Hutan dan Pelestarian Alam, Departemen
Kehutanan Jl.Ir.H.Juandan No.9 Bogor (dengan peta).
10. Direktur Jenderal Inventarisasi dan Tataguna Hutan, Departemen Kehutanan
di Jakarta (dengan peta).
11. Kepala Biro Hukum, Departemen Pertambangan dan Energi di Jakarta (dengan
peta).
12. Kepala Biro Keuangan, Departemen Pertambangan dan Energi di Jakarta (tanpa
peta).
13. Direktur Direktorat Teknik Pertambangan Umum di Jakarta (dengan peta).
14. Direktur Direktorat Pembinaan Pengusahaan Pertambangan di Jarkata (dengen
peta).
15. Gubernur Kepala Dareah Tingkat I Propinsi Riau (dengan peta).
16. Kepala Kanto Wilayah Departemen Pertambangan dan Energi di Pekanbaru
(dengan peta).
17. Kepala Kantor Wilayah Departemen Kehutanan di Pekanbaru (dengan peta).
18. Bupati Keplal Daerah Tingkat II Kabupaten Indragiri Hulu (dengan peta).
<PAGE> 47
[TRANSLATION NOT CURRENTLY AVAILABLE, BUT WILL BE PROVIDED BY AMENDMENT.]
Lampiran I : Keputusan Direktur Jenderal Pertambangan Umum
Nomor : 323.K/2013/DDJP/1994
Tanggal : 21 Oktober 1994
PENJULASAN BATAS WILAYAH KUASA PERTAMBANGAN EKSPLORASI
(D.U. 1001 / RIAU)
Sebelah Utara : a. garis sejajar terlatak pada 4.750 meter di sebelah
Selatan titik Triangulasi 111.
b. garis rembang terletak pada 7.500 meter di sebelah Timur
titik tersebut di atas.
c. garis sejajar terlatak pada 4.000 meter di sebelah
Selatan titik tersebut di atas.
Sebelah Timur : garis rembang terletak pada 12.000 meter di sebelah Timur
titik tersebut di atas.
Sebela Selatan : garis sejajar terlatak pada 8.000 meter di sebelah Selatan
titik tersebut di atas.
Sebelah Barat : garis rembang terletak pada 7.000 meter di sebelah Timur
titik tersebut di atas.
Direktur Directorat Teknik Pertambangan Umum
[SEAL]
Ir. Soelendro As
NIP. 100002158.
<PAGE> 48
[TRANSLATION NOT CURRENTLY AVAILABLE, BUT WILL BE PROVIDED BY AMENDMENT.]
[THIS IS A MAP OF
LAMPLHAN II KEPUTUSAN DIRJEN PERTAMBANGAN UMUM]
<PAGE> 49
[TRANSLATION NOT CURRENTLY AVAILABLE, BUT WILL BE PROVIDED BY AMENDMENT.]
Lampiran III : Keputusan Direktur Jenderal Pertambangan Umum
Nomor : 323.K/2013/DDJP/1994
Tanggal : 21 Oktober 1994
KEWAJIBAN-KEWAJIBAN PEREGANG KUASA PERTAMBANGAN EKSPLORASI
I. Pemegang Kuasa Pertambangan ini telah memilih tempat tinggal (domesili)
pada Pengadilan Negeri yang berkedudukan di ibu kota Propinsi Riau di
Pekanbaru.
II. Sebelum melakukan kegiatan, pemegang Kuasa Pertambangan ini harus lebih
dahulu memberitahukan kepada Pemerintah Daerah dan Kantor Wilayah
Departemen Pertambangan dan Energi di Pekanbaru.
III. Hubungan antara pemegang Kuasa Pertambangan dengan pemilik tanah dan
pihak ketiga, diatur menurut ketentuan-ketentuan yang berlaku.
IV. Pemegang Kuasa Pertambangan Eksplorais diwajibkan membayar Iuran Tetap
dan Iuran Eksplorasi menurut ketentuan yang berlaku dan harus dilunasi
sebelum beraknirnya Kuasa Pertambangan.
V. Jika terjadi pertindihan wilayah Kuasa Pertambangan dengan kepentingan
lahan lainnya, maka pemegang Kuasa Pertambangan sebelum melaksanakan
kagiatan dalam wilayah tersebut harus lebih dahulu menyelesaikannya
sesuai dengan ketentuan yang berlaku.
VI. a. Pemegang Kuasa Pertambangan harus memberikan laporan kegiatan 3
(tiga) bulan sekali kepada Direktur Jenderal Pertambangan Umum (1
expl.) dan tembusannya disampaikan kepada Direktur Direktorat Teknik
Pertambangan Umum (3 expl.), Kepala kantor Wilayah Departemen
Pertambangan dan Energi di Pekanbaru (1 expl.), Gubernur dan Bupati
Kepala Daerah setempat (masing-masing 1 expl.).
b. Selambat-lambatnya dalam waktu 6 (enam) bulan setelah tanggal
ditetapkannya Keputusan ini, Pemegang Kuasa Pertambangan harus sudah
menyampaikan laporan mengenai pematokan batas-batas wilayah Kuasa
Pertambangan tersebut.
VII. Dalam Bidang Pengawasan.
a. Pemegang Kuasa Pertambangan harus mematuhi/mentaati peratruan yang
berlaku mengenai Pengawasan Keselmatan dan Kesehatan Kerja serta
Lingkungan dibidang Pertambangan umum.
b. Pengawasan atas pelaksanaan Kuasa Pertambangan ini dilakukan oleh
Pelaksana Inpeksi Tambang dan/atau petugas yang ditunjuk oleh
Direktur Jenderal Pertambangan Umum.
c. Pemegang Kuasa Pertambangan dapat/diperkenankan meminta kepada
petugas tersebut untuk memperlihatkan surat-surat pengenal dan
surat-surat tugasnya.
VIII. a. Permohonan Perpanjangan atau permohonan Kuasa Pertambangan
Eksploitasi sebegai peningkatan harus kiajukan 3 (tiga) bulan sebelum
berakhirnya masa izin ini dengan desertai bukti-bukti kewajiban yang
telah dipenuhi.
b. Atas kelalaian tersebut pada huruf a, mengakibatkan:
1. Kuasa Pertambangan berakhir menurut hukum dan segala usaha
pertambangan harus dihentikan.
2. Sealmbat-lambatnya dalam watku 6 (enam) bulan sejak tanggal
berkahirnya Keputusan ini, pemegang Kuasa Pertambangan mengangkat
keluar segala sesuatu yang menjadi milikanya kecuali benda-benda/
bangunan-bangunan yang dipergunakan untuk kepentingan umum.
DIREKTUR JENDERAL PERTAMBANGAN UMUM
[SEAL]
KONTORO MANGKUSUBROTO
<PAGE> 50
DEVELOPMENT AGREEMENT
GOLD MINING PROJECT IN EAST KALIMANTAN
THE MUNUNG GOLD MINING CONCESSION
This development Agreement (AGREEMENT) is made and entered into on this ___ day
of February, 1977 by and between:
PT MUARA MAYANG COAL UTAMA, a limited liability company established and validly
existing under Indonesian law, and having its address at Komplek Pertokoan Pulo
Mas Blok VII/15-16, Jakarta Timur - Indonesia (hereinafter referred to as "MUARA
MAYANG"), and is represented in this Agreement by its Direktur Utama, Mr. T.
Jusri Djamal; and
KALIMAS JAYA LTD., a Bahamas Corporation having its registered offices in the
Bahamas and its representative offices in Singapore (hereinafter referred to as
"KALIMAS"), and is represented in this Agreement by its President Director, Mr.
William Chan.
Muara Mayang and Kalimas are hereinafter referred to collectively as "THE
PARTIES."
WITNESSETH
Whereas, the government of Indonesia acting through its Department of Mines and
Energy and the Directorate General of General Mining (hereinafter referred to as
the "DGGM") wishes to expand on its enhanced exploration and exploitation for
gold and other precious metals during the next Sixth Development Plan (known as
Repelita VI) and beyond, and encourages the private sector to participate in
such exploration, development, exploitation and production; and
Whereas KALIMAS is actively seeking to acquire gold mining concessions and to
implement gold mining activities in East Kalimantan, Indonesia (hereinafter
referred to as the "PROJECT"); and
Whereas MUARA MAYANG currently controls a valid government license, known as
Kuasa Pertambangan Penyelidikan Umum and which is listed in official government
records as Number 378.K/2012/DDJP/1996, for the general survey and exploration
of gold minerals on a 6,096-HECTARE Concession, known as the Munung Gold Mining
Concession in East Kalimantan. Muara Mayang can successfully demonstrate that it
has officially blocked this area of land at the DGGM and that it has also
received a valid license from the DGGM for the general survey and exploration of
gold and other metals on this Concession. Muara Mayang recognizes the importance
of obtaining other government licenses associated with the exploitation of gold
and other metals, for which licenses also include the refinery and production of
gold and other metals as well as the transportation and sale of gold and other
metals; Muara Mayang will use its expert abilities and efforts to obtain these
additional licenses from the Government in order to facilitate the development,
implementation, and success of the Project; and
Munung Gold Mining Concession 1
<PAGE> 51
Whereas both Parties agree to use their best efforts to complete the sale,
acquisition, and development of the Munung Gold Mining Concession (hereinafter
referred to as the "TRANSACTION"), which includes the rights to the government
license for the general survey and exploration of gold and other metals on the
Concession. The Parties also agree to jointly cooperate to successfully obtain
any and all other government licenses which will be necessary for the success of
the Project; and
Whereas the Munung Gold Mining Concession (hereinafter referred to as the
"CONCESSION") is located in East Kalimantan, Indonesia, and potentially has
substantial deposits of gold and other precious metals. The Concession
encompasses mining authorizations with respect to approximately 6,096 hectares
of land. A geographical description of the concession is provided in EXHIBIT I
which is attached to this Agreement. The Concession is located in a gold
mineralization zone and, more importantly, is ___ km to the northwest of the
famous Kelian Gold Mining Concession which - to date - has approximately 5
million ounces of gold and is still under further exploration. Through official
filings and monetary payments made to the DGGM (which includes both filing and
annual fees as well as seriousness bonds), Muara Mayang has secured the rights
to the Concession as well as the government licenses for the general survey and
exploration of gold on the Concession. These documents and, most importantly, a
copy of the KP License obtained by Muara Mayang are shown in EXHIBIT II, which
is attached to this Agreement.
DESCRIPTION OF THE CONCESSION: 6096 HECTARES IN EAST KALIMANTAN
The Concession consists of approximately 6096 hectares of land. An official
government license has been issued in respect of the Concession and permits
Muara Mayang to perform a general survey and explore the gold and other metals
on the Concession. The License which was issued is delineated as follows:
1 - KUASA PERTAMBANGAN PENYELIDIKAN UMUM
No. 378.K/2012/DDJP/1996
Issued on 28 August 1996 to PT Muara Mayang Mas
This license is for the general survey and exploration of gold
metals on the 6096-hectare concession.
This official government license, which provides the rights to perform a general
survey and explore for gold and other metals on the Concession, is provided in
EXHIBIT II, which is attached to this Agreement.
For purposes of this Transaction, MR. T. JUSRI DJAMAL, as Direktur Utama of PT
Muara Mayang Mas, has been granted the complete and/or official authorization,
through a General Shareholder's Meeting (subject to stated provisions in the
Company's Articles of Association), to sell 80% of Muara Mayang's interest in
the Concession, including the full and complete transfer of the government
rights to explore for gold and other metals on the Concession. These official
authorizations for Mr. Djamal are referenced in EXHIBIT III, which is attached
to this Agreement. Although Muara Mayang will actively seek to obtain the
additional government licenses for the commercial exploitation of gold and other
metals (including the licenses for the refinery, production, transportation,
Munung Gold Mining Concession 2
<PAGE> 52
and sale of gold and other metals), Muara Mayang recognizes that these
additional government licenses will also be transferred to Kalimas or to some
third party which is appointed by Kalimas. To date, Muara Mayang has secured the
government license for the general survey and exploration of gold and other
metals on the Concession as referenced in Exhibit II. This government license is
currently valid and is in the legal form of a Kuasa Pertambangan (KP). The
License is valid for a period of one (1) year and is renewable before maturity.
ADDITIONAL GOVERNMENT LICENSES
Muara Mayang will cooperate exclusively with Kalimas and/or Kalimas' appointed
third party to expand the scope of the current license to include other
additional government licenses, which are as follows:
1- License (KP) for Exploitation
2- License (KP) for Refinery and Production
3- License (KP) for transportation & Sale
Muara Mayang will use its expert abilities and efforts for obtaining these
additional government licenses from the DGGM. The purpose of obtaining all of
the necessary licenses is to make it feasible to effectively and efficiently
mine the Concession and to make it into a world-class profitable operation.
Whereas Kalimas has the ability to provide and/or secure financing to acquire an
80% interest in the Munung Gold Mining Concession and the related government
licenses from Muara Mayang as well as the ability to develop the Concession into
a world-class mining operation.
Now therefore, the Parties hereto agree as follows:
1. COOPERATION
In accordance with the Government Approvals which have already been granted to
Muara Mayang, the Parties agree as follows:
1.1 To submit additional application(s), as necessary, to the DGGM
for the licenses and/or mandates to explore for gold and other
precious metals on the Concession as well as commercial
licenses and/or mandates that are associated with refinery,
production, transportation and sale of gold from the
concession.
1.2 To complete the sale, acquisition, and development of the
concession
1.3 To support, develop, and complete the mining operations
Munung Gold Mining Concession 3
<PAGE> 53
2. EXCLUSIVITY
Except as otherwise provided for in this Agreement, the Parties warrant that
they shall cooperate solely and exclusively with each other in connection with
this Gold Mining Project and that none of them shall enter into any agreement
with any other firm or group of firms with respect to any matters related to
this Project without the prior written consent of the other Party and to keep
this information strictly confidential. Further, Muara Mayang will grant Kalimas
a first right of refusal with respect to any gold mining Concessions which it
may control, influence the sale of, or be able to recommend to Kalimas.
The Parties also warrant that such exclusivity will be respected by those
persons or firms which they may exercise control or with their affiliate in any
manner.
3. SPONSORSHIP
Muara Mayang shall act as the main sponsor of this Project. In this regard,
Muara Mayang has already obtained the complete and proper approvals (which are
subject to legal verification) to sell an 80% interest in the concession, which
includes the full and complete rights to transfer the government Licenses which
Muara Mayang has received for the exploration and exploitation of gold and other
precious metals on the Concession. The Licenses which have been granted to Muara
Mayang as well as all geological and other significant information will be made
available to the Parties on a continual basis. Further, Muara Mayang will obtain
the other appropriate government licenses associated with the refinery,
production, transport, and sale of gold and other metals.
4. INITIAL RESPONSIBILITIES
The Parties agree that their responsibilities shall be as follows:
4.1 MUARA MAYANG has already secured the proper approvals to sell an
80% interest in the Munung Concession as well as the approvals
for the full and complete transfer of its rights to the
Concession which includes the Government Licenses. Upon the
successful completion of the acquisition of the Munung
Concession, Muara Mayang will continue to assist with the
development of the Project in conjunction with the Parties as
needed. In particular, Muara Mayang will take all steps
necessary or deemed advisable by Kalimas to secure any and all
other appropriate government licenses associated with
exploration, exploitation, refinery, production, and transport &
sale of gold and other metals. Muara Mayang has reviewed
preliminary geological surveys on the Concession and will
provide all of this information as well as all future
information to the Parties on a continual basis.
Munung Gold Mining Concession 4
<PAGE> 54
Muara Mayang will give Kalimas first priority/option for any
future gold mining opportunities for acquisition and/or for
working together in seeking other gold mining projects. In
particular, Muara Mayang must give first priority to Kalimas to
acquire any additional Concession which are contiguous with the
current Concession. In those instances where these contiguous
Concession and/or other Concession region are owned and/or
controlled by friends, families, and/or directors of other local
PT Companies which are associated with Muara Mayang, Muara
Mayang must give priority to Kalimas to acquire such Concession,
if available.
4.2 KALIMAS will be responsible to provide and/or secure financing
for the Project, provide world-class technologies and
management/exploration teams and, if necessary, a strategic
operator(s) to develop the Concession. Kalimas will jointly
assist the Project with Muara Mayang.
4.3 KALIMAS shall appoint a qualified Indonesian party to accept the
transfer of the licenses issued by the Department of Mines of
the Republic of Indonesia and may at any time at its discretion
cause or permit such party to transfer such Concession and
licenses to any third party based on prevailing regulations and
subject to Muara Mayang's continuing rights under the Agreement
being respected by such transferee.
5. TERMS & CONDITIONS FOR SALE & ACQUISITION
5.1 Muara Mayang will sell an 80% interest in the Concession as well
as transfer its full and complete rights to the Government
License for the general survey and exploration of gold and other
metals on the Concession. Furthermore, Muara Mayang's principals
and/or affiliates will not compete with Kalimas.
5.2 Payment For:
(a) Muara Mayang agrees to sell 80% of its interest in the
Concession as well as its full and complete rights to the
Government Licenses to such qualified party as indicated
by Kalimas that may be appointed for the price of USD
$_______________.
(b) All payments hereunder shall be subject to continual
fulfillment by Muara Mayang of its obligations under this
Agreement.
5.3 Payment Conditions:
(a) Kalimas agrees to make a down payment of USD
$____________ after the signing of this Agreement. This
payment, however, is subject to legal verification that
the title to the Concession is acceptable and without
encumbrances and that the government license issued to
Muara Mayang is current and valid.
Munung Gold Mining Concession 5
<PAGE> 55
Furthermore, payment is to be made after the survey test
results from the initial investigation/exploration activity is
completed and any other legal verifications which may be
required in respect of title to the Concession and validity of
government licenses.
(b) The final payment of USD $______________________ will be
immediately paid to Muara Mayang upon the Gold Mine(s) being
put into the production stage and is generating positive
revenues. For this to occur, however, Muara Mayang must first
secure the complete and proper government licenses.
Specifically, Muara Mayang must secure those additional
government licenses which will allow the Parties to put the
Mine(s) into the production stage. Such government licenses
are as follows:
- KP Exploration & Exploitation
- KP Refinery & Production
- KP Transportation & Sale
Muara Mayang recognizes that once it secures these licenses
for the benefit of the Parties and, moreover, for the benefit
of the Project, Muara Mayang will transfer the full and
complete rights of these licenses to Kalimas or to the entity
appointed by Kalimas.
5.4 Profit Sharing/Shareholding
The Parties hereby agree that the Profit Sharing from the net profit
(total revenue minus all expenses including taxes) to the Project shall
be as follows:
Kalimas 80%
Muara Mayang 20%
The said percentage which is entitled to Muara Mayang will be held
offshore for the benefit of Muara Mayang.
5.3 Reimbursement of Expenses
Kalimas agrees to relinquish to or reimburse Muara Mayang for the funds
which Muara Mayang expended towards the Seriousness Bond which it paid
to the DGGM for blocking the 6096-hectare Concession. These funds
amount to a total of RP.___________. Receipts for these expenses are
referenced in EXHIBIT IV. Terms and Conditions for the reimbursement of
these expenses are to be determined by the Parties.
Munung Gold Mining Concession 6
<PAGE> 56
5.6 Exploration Program
(a) Kalimas agrees to begin the Exploration Program on
the Concession by March/April 1997 or at a time
mutually agreed between the Parties:______________.
(b) Kalimas will dig numerous test pits as part of the
exploration program.
(c) Shallow drilling to the depth of 50-60 meters will be
carried out over the first 90-day period or at a
practical time.
(d) Deep drilling to the depth of 200 meters will also be
carried out over the second 90-day period or at a
practical time.
(e) Kalimas agrees to provide and/or secure 100% finance
the Exploration Program for the development and
implementation of the Munung Gold Mine. In this
regard, Kalimas agrees to spend a minimum of USD
$100,000 in Year 1; USD $100,000 in Year 2; and USD
#100,000 in Year 3. Accounting records for these
expenditures will be kept by Kalimas.
6. JURISDICTION
6.1 (a) Any dispute or controversies which may arise out of
this Agreement shall be amicably settled by the
Parties, but in failure thereof, such disputes or
controversies shall be referred to the arbitration of
the Rules of Badan Arbitrasi Nasional Indonesia
(BANI). The arbitration panel shall consist of three
(3) arbitrators, one (1) chosen by the complainant,
one (1) chosen by the respondent and a Chairman
chosen by the arbitrators named by the complainant
and the respondent.
(b) The Parties expressly agree that (i) the arbitration
tribunal shall decide the matter as expeditiously as
possible, however no time limits shall be imposed,
(ii) Section 631 of the R.V. (Reglement op de
Rechtsvordering) shall apply, and that accordingly
the arbitrators shall only reach their decision by
applying strict rules of law to the facts and shall
not purport to resolve any dispute ex aequo et bono,
(iii) the arbitration shall be conducted in the
English language, in Jakarta, Indonesia, or such
other place or places in Indonesia as the Parties to
the arbitration may agree, (iv) the Party in whose
favor the arbitral award is rendered shall be
entitled to recover costs and expenses of the
arbitration tribunal including but not limited to the
cost and expense of administration of the arbitration
proceedings, and (v) the arbitral award shall be
issued in Indonesia.
Munung Gold Mining Concession 7
<PAGE> 57
(c) The Parties expressly agree to waive Section 641 of
the R.V. and any other applicable laws permitting
appeal to courts of law or any other body so that
accordingly there shall be no appeal to any court of
law or any other body from the decision (or any
interim decision) of the arbitrators and neither
party shall dispute nor question such decision before
any judicial authority in the Republic of Indonesia
or elsewhere.
(d) Pending the submission to arbitration and thereafter
until the arbitration tribunal issues its decision,
each Party shall, except in the event of expiration,
termination or failure by the other Party to obey or
comply with a specific order or decision of the
arbitration tribunal, continue to perform all of its
obligations under this Agreement without prejudice to
a final adjustment in accordance with the said award.
6.2 This Agreement as to its interpretation and application shall
be governed by the Laws of Indonesia.
6.3 The Parties hereby expressly agree to waive the provision of
Article 1266 of the Indonesian Civil Code with respect to the
need for a court pronouncement to terminate this Agreement.
7. TERM OF VALIDITY
This Agreement shall be in effect as of February ___, 1997,l and shall be valid
until the purposes and objectives of the Project have been fulfilled.
If for any reason the transfer of the Concession is not approved by the
Government Authorities within (6) months after the date of this Agreement
Kalimas shall have the option to terminate this Agreement with no further
liability hereunder.
8. OTHER MATTERS
Other matters not stipulated in this Agreement shall be further discussed and
decided later on through mutual discussion between the Parties on the basis of
this Agreement.
Munung Gold Mining Concession 8
<PAGE> 58
In Witness Whereof, the Parties agree that this Agreement is legal and binding
and have caused their duly authorized representatives to execute this Agreement
on the year and date first above stated.
SIGNATORIES
PT MUARA MAYANG MAS KALIMAS JAYA LTD.
BY: [/S/] BY: [/S/]
------------------------------- --------------------------
NAME: NAME: WILLIAM CHAN
TITLE: DIREKTUR UTAMA TITLE: PRESIDENT DIRECTOR
Munung Gold Mining Concession 9
<PAGE> 59
LIST OF EXHIBITS
================================================================================
Exhibit I: Geographical Description of Property
Exhibit II: Government Filings and License
Exhibit III: General Shareholders' Meeting
Exhibit IV: Reimbursement Expenses
Munung Gold Mining Concession 10
<PAGE> 60
DEVELOPMENT AGREEMENT
GOLD MINING PROJECT IN EAST KALIMANTAN
THE LONG BELEH GOLD MINING CONCESSION
This Development Agreement (AGREEMENT) is made and entered into on this 14th day
of February, 1997 by and between:
PT MUARA KOMAN MAS, a limited liability company established and validly existing
under Indonesian law, and having its address at Komplek Pertokoan Pulo Mas Blok
IVV/15-16, Jakarta Timur - Indonesia (hereinafter referred to as "MUARA KOMAN),"
and is represented in this Agreement by its Direktur Utama, Mr. T. Jusri Djamal;
and
KALIMAS JAYA LTD., a Bahamas Corporation having its registered offices in the
Bahamas and its representative offices in Singapore (hereinafter referred to as
"KALIMAS"), and is represented in this Agreement by its President Director, Mr.
William Chan.
Muara Koman and Kalimas are hereinafter referred to collectively as "THE
PARTIES."
WITNESSETH
Whereas, the Government of Indonesia acting through its Department of Mines and
Energy and the Directorate General of General Mining (hereinafter referred to as
the "DGGM") wishes to expand on its enhanced exploration and exploitation for
gold and other precious metals during the next Sixth Development Plan (known as
Repelita VI) and beyond, and encourages the private sector to participate in
such exploration, development, exploitation and production; and
Whereas KALIMAS is actively seeking to acquire gold mining concessions and to
implement gold mining activities in East Kalimantan, Indonesia (hereinafter
referred to as the "PROJECT"); and
Whereas MUARA KOMAN currently controls a valid government license, known as
Kuasa Pertambangan Penyelidikan Umum and which is listed in official government
records as Number 422.K/20122/DDJP/1996 for the general survey and exploration
of gold and other metals on a 4,637-HECTARE Concession, known as the Long Beleh
Gold Mining Concession in East Kalimantan. Muara Koman can successfully
demonstrate that it has officially blocked this area of land at the DGGM and
that it has also received a valid license from the DGGM for the general survey
and exploration of gold and other metals on this Concession. Muara Koman
recognizes the importance of obtaining other government licenses associated with
the exploitation of gold and other metals, for which licenses also include the
refinery and production of gold and other metals as well as the transportation
and sale of gold and other metals; Muara Koman will use its expert abilities and
efforts to obtain these additional licenses from the Government in order to
facilitate the development, implementation, and successes of the Project; and
Long Beleh Gold Mining Concession 1
<PAGE> 61
Whereas both Parties agree to use their best efforts to complete the sale,
acquisition, and development of the Long Beleh Gold Mining Concession
(hereinafter referred to as the "TRANSACTION"), which includes the rights to the
government license for the general survey and exploration of gold and other
metals on the Concession. The Parties also agree to jointly cooperate to
successfully obtain any and all other government licenses which will be
necessary for the success of the Project; and
Whereas the Long Beleh Gold Mining Concession (hereinafter referred to as the
"CONCESSION") is located in East Kalimantan, Indonesia, and potentially has
substantial deposits of gold and other precious metals. The Concession
encompasses mining authorizations with respect to approximately 4,637 hectares
of land. A geographical description of the Concession is provided in Exhibit I,
which is attached to this Agreement. The Concession is located in a gold
mineralization zone and, more importantly, is ___ km to the south of the famous
Busang Gold Mining Concession which - to date - has approximately 57 million
ounces of gold and is still under further exploration. Through official filings
and monetary payments made to the DGGM (which includes both filing and annual
fees as well as seriousness bonds), Muara Koman has secured the rights to the
Concession as well as the government licenses for the general survey and
exploration of gold on the concession. These documents and, most importantly, a
copy of the KP License obtained by Muara Koman are shown in EXHIBIT II, which is
attached to this Agreement.
DESCRIPTION OF THE CONCESSION: 4,637 HECTARES IN EAST KALIMANTAN
The Concession consists of approximately 4,637 hectares of land. An official
government license has been issued in respect of the Concession and permits
Muara Koman to perform a general survey and explore for gold and other metals on
the Concession. The License which was issued is delineated as follows:
1 - KUASA PERTAMBANGAN PENYELIDIKAN UMUM
No. 422.K/2012/DDJP/1996
Issued on 16 September to PT Muara Koman Mas
This license is for the general survey and exploration of
gold metals on the 4,637-hectare concession
This official government license, which provides the rights to perform a general
survey and explore for gold and other metals on the Concession is provided in
EXHIBIT II, which is attached to this agreement.
For purposes of this Transaction, MR. T. JUSRI DJAMAL, as Direktur Utama of PT
Muara Komana Mas, has been granted the complete and/or official authorization,
through a General Shareholder's Meeting (subject to stated provisions in the
Company's Articles of Association), to sell 80% of Muara Koman's interest in the
concession, including the full and complete transfer of the government rights to
explore for gold and other metals on the concession. These official
authorizations for Mr. Jamal are referenced in EXHIBIT III, which is attached to
this Agreement. Although Muara Koman will actively seek to obtain the additional
government licenses for the commercial exploitation of gold and other metals
(including the licenses for the refinery, production, transportation and sale
Long Beleh Gold Mining Concession 2
<PAGE> 62
of gold and other metals), Muara Koman recognizes that these additional
government licenses will also be transferred to Kalimas or to some third party
which is appointed by Kalimas. To date, Muara Koman has secured the government
license for the general survey and exploration of gold and other metals on the
Concession as referenced in Exhibit II. This government license is currently
valid and is in the legal form of a Kuasa Pertambangan (KP). The License is
valid for a period of one (1) year and is renewable before maturity.
ADDITIONAL GOVERNMENT LICENSES
Muara Koman will cooperate exclusively with Kalimas and/or Kalimas' appointed
third party to expand the scope of the current license to include other
additional government licenses which are as follows:
1- License (KP) for Exploitation
2- License (KP) for Refinery and Production
3- License (KP) for transportation & Sale
Muara Koman will use its expert abilities and efforts for obtaining these
additional government licenses from the DGGM. The purpose of obtaining all of
the necessary licenses is to make it feasible to effectively and efficiently
mine the Concession and to make it into a world-class profitable operation.
Whereas KALIMAS has the ability to provide and/or secure financing to acquire an
80% interest in the Long Beleh Gold Mining Concession and the related government
licenses from Muara Koman as well as the ability to develop the Concession into
a world-class mining operation.
Now therefore, the Parties hereto agree as follows:
1. COOPERATION
In accordance with the Government Approvals which have already been granted to
Muara Koman, the Parties agree as follows:
1.1 To submit additional application(s), as necessary, to the DGGM
for the licenses and/or mandates to explore for gold and other
precious metals on the concession as well as commercial
licenses and/or mandates that are associated with refinery,
production, transportation and sale of gold from the
Concession.
1.2 To complete the sale, acquisition, and development of the
Concession
1.3 To support, develop, and complete the mining operations
Long Beleh Gold Mining Concession 3
<PAGE> 63
2. EXCLUSIVITY
Except as otherwise provided for in this Agreement, the Parties warrant that
they shall cooperate solely and exclusively with each other in connection with
this Gold Mining Project and that none of them shall enter into any agreement
with any other firm or group of firms with respect to any matters related to
this Project without the prior written consent of the other Party and to keep
this information strictly confidential. Further, Muara Koman will grant Kalimas
a first right of refusal with respect to any gold mining Concessions which it
may control, influence the sale of, or be able to recommend to Kalimas.
The Parties also warrant that such exclusivity will be respected by those
persons or firms which they may exercise control or with their affiliate in any
manner.
3. SPONSORSHIP
Muara Koman shall act as the main sponsor of this Project. In this regard, Muara
Koman has obtained the complete and proper approvals (which are subject to legal
verification) to sell an 80% interest in the Concession, which includes the full
and complete rights to transfer the Government Licenses which Muara Koman has
received for the exploration and exploitation of gold and other precious metals
on the Concession. The Licenses which have been granted to Muara Koman as well
as all geological and other significant information will be made available to
the Parties on a continual basis. Furthermore, Muara Koman will obtain the other
appropriate government licenses associated with the refinery and production of
gold and other metals as well as the licenses for the transportation and sale of
gold and other metals.
4. INITIAL RESPONSIBILITIES
The Parties agree that their responsibilities shall be as follows:
4.1 MUARA KOMAN has already secured the proper approvals to sell
an 80% interest in the Long Beleh Concession as well as the
approvals for the full and complete transfer of its rights to
the Concession, which includes the Government Licenses. Upon
the successful completion of the acquisition of the Long
Beleh Concession, Muara Koman will continue to assist with
the development of the Project in conjunction with the
Parties as needed. In particular, Muara Koman will take all
steps necessary or deemed advisable by Kalimas to secure any
and all other appropriate government licenses associated with
exploration, exploitation, refinery, production, and
transport & sale of gold and other metals. Muara Koman has
reviewed preliminary geological surveys on the Concession and
will provide all of this information as well as all future
information to the Parties on a continual basis.
Long Beleh Gold Mining Concession 4
<PAGE> 64
Muara Koman will give Kalimas first priority/option for any
future gold mining opportunities for acquisition and/or for
working together in seeking other gold mining projects. In
particular, Muara Koman must give first priority to Kalimas
to acquire any additional Concession which are contiguous
with the current Concession. In those instances where these
contiguous Concession and/or other Concession region are
owned and/or controlled by friends, families, and/or
directors of other local PT Companies which are associated
with Muara Koman, Muara Koman must give priority to Kalimas
to acquire such Concession, if available.
4.2 KALIMAS will be responsible to provide and/or secure
financing for the Project, provide world-class technologies
and management/exploration teams and, if necessary, a
strategic operator(s) to develop the Concession. Kalimas will
jointly assist the Project with Muara Koman.
4.3 KALIMAS shall appoint a qualified Indonesian party to accept
the transfer of the licenses issued by the Department of
Mines of the Republic of Indonesia and may at any time at its
discretion cause or permit such party to transfer such
Concession and licenses to any third party based on
prevailing regulations and subject to Muara Koman's
continuing rights under the Agreement being respected by such
transferee.
5. TERMS & CONDITIONS FOR SALE & ACQUISITION
5.1 Muara Koman will sell an 80% interest in the concession as
well as transfer its full and complete rights to the
Government License for the general survey and exploration of
gold and other metals on the Concession. Furthermore, Muara
Koman's principals and/or affiliates will not complete with
Kalimas.
5.2 Payment For:
(a) Muara Koman agrees to sell 80% of its interest in the
Concession as well as transfer its full and complete
rights to the Government Licenses to such qualified
party as indicated by Kalimas that may be appointed
for the price of USD $1,000,000.
(b) All payments hereunder shall be subject to continual
fulfillment by Muara Koman of its obligations under
this Agreement.
5.3 Payment Conditions:
(a) Kalimas agrees to make a down payment of USD $150,000
after the signing of this Agreement. This payment,
however, is subject to legal verification that the
title to the Concession is acceptable and without
encumbrances and that the government license issued
to Muara Koman is current and
Long Beleh Gold Mining Concession 5
<PAGE> 65
valid. Furthermore, payment is to be made after the
survey test results from the initial
investigation/exploration activity is completed and
any other legal verifications which may be required
in respect of title to the Concession and validity of
government licenses.
(b) The final payment of US $850,000 will be immediately
paid to Muara Koman upon the Gold Mine(s) being put
into the production stage and is generating positive
revenues. For this to occur, however, Muara Koman
must first secure the complete and proper government
licenses. Specifically, Muara Koman must secure those
additional government licenses which will allow the
Parties to put the Mine(s) into the production stage.
Such government licenses are as follows:
- KP Exploration & Exploitation
- KP Refinery & Production
- KP Transportation & Sale
Muara Koman recognizes that once it secures these
licenses for the benefit of the Parties and,
moreover, for the benefit of the Project, Muara Koman
will transfer the full and complete rights of these
licenses to Kalimas or to the entity appointed by
Kalimas.
5.4 Profit Sharing/Shareholding
The Parties hereby agree that the Profit Sharing from the net
profit (total revenue minus all expenses including taxes) to
the Project shall be as follows:
Kalimas 80%
Muara Koman 20%
The said percentage which is entitled to Muara Koman will be
held offshore for the benefit of Muara Koman.
5.5 Reimbursement of Expenses
Kalimas agrees to relinquish to or reimburse Muara Koman for
the funds which Muara Koman expended towards the Seriousness
Bond which is paid to the DGGM for blocking the 4,637-hectare
Concession. These funds amount to a total of Rp. to be
determined. Receipts for these expenses are referenced in
EXHIBIT IV. Terms and Conditions for the reimbursement of
these expenses are to be determined by the Parties.
Long Beleh Gold Mining Concession 6
<PAGE> 66
5.6 Exploration Program
(a) Kalimas agrees to begin the Exploration Program on
the Concession by March/April 1997 or sooner, or at a
time mutually agreed between the parties: 14th
February.
(b) Kalimas will dig numerous test pits as part of the
exploration program.
(c) Shallow drilling to the depth of 50-60 meters will be
carried out over the first 90-day period or at a
practical time.
(d) Deep drilling to the depth of 200 meters will also be
carried out over the second 90-day period or at a
practical time.
(e) Kalimas agrees to provide and/or secure 100% finance
the Exploration Program for the development and
implementation of the Long Beleh Gold Mine. In this
regard, Kalimas agrees to spend a minimum of USD
#100,000 in Year 1; USD $100,000 in Year 2; and USD
$100,000 in Year 3. Accounting records for these
expenditures will be kept by Kalimas
6. JURISDICTION
6.1 (a) Any dispute or controversies which may arise out of
this Agreement shall be amicably settled by the
Parties, but in failure thereof, such disputes or
controversies shall be referred to the arbitration of
the Rules of Badan Arbitrasi Nasional Indonesia
(BANI). The arbitration panel shall consist of three
(3) arbitrators, one (1) chosen by the complainant,
one (1) chosen by the respondent and a Chairman
chosen by the arbitrators named by the complainant
and the respondent.
(b) The Parties expressly agree that (e) the arbitration
tribunal shall decide the matter as expeditiously as
possible; however, no time limits shall be imposed,
(ii) Section 631 of the R.V. (Reglement op de
Rechtsvordering) shall apply, and that accordingly
the arbitrators shall only reach their decision by
applying strict rules of law to the facts and shall
not purport to resolve any dispute ex aequo et bono,
(iii) the arbitration shall be conducted in the
English language, in Jakarta, Indonesia, or such
other place or places in Indonesia as the Parties to
the arbitration may agree, (iv) the Party in whose
favor the arbitral award is rendered shall be
entitled to recover costs and expenses of the
arbitration tribunal including but not limited to the
cost and expense of
Long Beleh Gold Mining Concession 7
<PAGE> 67
administration of the arbitration proceedings, and
(v) the arbitral award shall be issued in Indonesia.
(c) The Parties expressly agree to waive Section 641 of
the R.V. and any other applicable laws permitting
appeal to courts of law or any other body so that
accordingly there shall be no appeal to any court of
law or any other body from the decision (or any
interim decision) of the arbitrators and neither
party shall dispute nor question such decision before
any judicial authority in the Republic of Indonesia
or elsewhere.
(d) Pending the submission to arbitration and thereafter
until the arbitration tribunal issues its decision,
each Party shall, except in the event of expiration,
termination or failure by the other Party to obey or
comply with a specific order or decision of the
arbitration tribunal, continue to perform all of its
obligations under this Agreement without prejudice to
a final adjustment in accordance with the said award.
6.2 This Agreement as to its interpretation and application shall
be governed by the Laws of Indonesia.
6.3 The Parties hereby expressly agree to waive the provision of
Article 1266 of the Indonesian Civil Code with respect to the
need for a court pronouncement to terminate this Agreement.
7. TERM OF VALIDITY
This Agreement shall be in effect as of February 14th, 1997, and shall be valid
until the purposes and objectives of the Project have been fulfilled.
If for any reason the transfer of the Concession is not approved by the
Government Authorities within (6) months after the date of this Agreement
Kalimas shall have the option to terminate this Agreement with no further
liability hereunder.
8. OTHER MATTERS
Other matters not stipulated in this Agreement shall be further discussed and
decided later on through mutual discussion between the Parties on the basis of
this Agreement.
Long Beleh Gold Mining Concession 8
<PAGE> 68
In Witness Whereof, the Parties agree that this Agreement is legal and binding
and have caused their duly authorized representatives to execute this Agreement
on the year and date first above stated.
SIGNATORIES
PT MUARA KOMAN MAS KALIMAS JAYA LTD.
BY: /S/ BY: /S/
----------------------------- -------------------------
NAME: MR. T. JUSRI DJAMAL NAME: WILLIAM CHAN
TITLE: DIREKTUR UTAMA TITLE: PRESIDENT DIRECTOR
Long Beleh Gold Mining Concession 9
<PAGE> 69
DEVELOPMENT AGREEMENT
GOLD MINING PROJECT IN EAST KALIMANTAN
THE TELEN GOLD MINING CONCESSION
This Development Agreement (AGREEMENT) is made and entered into on this 14th day
of February, 1997 by and between:
PT WALEA BAHIMAS, a limited liability company established and validly existing
under Indonesian law, and having its address at Komplek Pertokoan Pulo Mas Blok
VII/15-16, Jakarta Timur - Indonesia (hereinafter referred to as "WALEA
BAHIMAS"), and is represented in this Agreement by its Direktur Utama, Mr. T.
Jusri Djamal; and
KALIMAS JAYA LTD., a Bahamas Corporation having its registered offices in the
Bahamas and its representative offices in Singapore (hereinafter referred to as
"KALIMAS"), and is represented in this Agreement by its President Director, Mr.
William Chan.
Walea Bahimas and Kalimas are hereinafter referred to collectively as "THE
PARTIES."
WITNESSETH
Whereas, the Government of Indonesia acting through its Department of Mines and
Energy and the Directorate General of General Mining (hereinafter referred to as
the "DGGM") wishes to expand on its enhanced exploration and exploitation for
gold and other precious metals during the next Sixth Development Plan (known as
Repelita VI) and beyond, and encourages the private sector to participate in
such exploration, development, exploitation and production; and
Whereas KALIMAS is actively seeking to acquire gold mining concessions and to
implement gold mining activities in East Kalimantan, Indonesia (hereinafter
referred to as the "PROJECT"); and
Whereas WALEA BAHIMAS currently controls a valid government license, known as
Kuasa Pertambangan Penyelidikan Umum and which is listed in official government
records as Number 379.k/2012/DDJP/1996, for the general survey and exploration
of gold and other metals on a 687-HECTARE Concession, known as the Telen Gold
Mining Concession in East Kalimantan. Walea Bahimas can successfully demonstrate
that it has officially blocked this area of land at the DGGM and that it has
also received a valid license from the DGGM for the general survey and
exploration of gold and other metals on this Concession. Walea Bahimas
recognizes the importance of obtaining other government licenses associated with
the exploitation of gold and other metals, for which licenses also include the
refinery and production of gold and other metals as well as the transportation
and sale of gold and other metals; Walea Bahimas will use its expert abilities
and efforts to obtain these additional licenses from the Government in order to
facilitate the development, implementation, and success of the Project; and
Telen Gold Mining Concession 1
<PAGE> 70
Whereas both Parties agree to use their best efforts to complete the sale,
acquisition, and development of the Telen Gold Mining Concession (hereinafter
referred to as the "TRANSACTION"), which includes the rights to the government
license for the general survey and exploration of gold and other metals on the
Concession. The Parties also agree to jointly cooperate to successfully obtain
any and all other government licenses which will be necessary for the success of
the Project; and
Whereas the Telen Gold Mining Concession (hereinafter referred to as the
"CONCESSION") is located in East Kalimantan, Indonesia, and potentially has
substantial deposits of gold and other precious metals. The Concession
encompasses mining authorizations with respect to approximately 687 hectares of
land. A geographical description of the Concession is provided in EXHIBIT I,
which is attached to this Agreement. The Concession is located in a gold
mineralization zone and, more importantly, is ___ km to the east of the famous
Busang Gold Mining Concession which - to date - has approximately 57 million
ounces of gold and is still under further exploration. Through official filings
and monetary payments made to the DGGM (which includes both filing and annual
fees as well as seriousness bonds), Walea Bahimas has secured the rights to the
Concession as well as the government licenses for the general survey and
exploration of gold on the Concession. These documents and, most importantly, a
copy of the KP License obtained by Walea Bahimas are shown in EXHIBIT II, which
is attached to this Agreement.
DESCRIPTION OF THE CONCESSION: 687 HECTARES IN EAST KALIMANTAN
The Concession consists of approximately 6096 hectares of land. An official
government license has been issued in respect of the Concession and permits
Walea Bahimas to perform a general survey and explore for gold and other metals
on the Concession. The License which was issued is delineated as follows:
1 - KUASA PERTAMBANGAN PENYELIDIKAN UMUM
No. 379.K/2012/DDJP/1996
Issued on 28 August 1996 to PT Walea Bahimas Mas
This license is for the general survey and exploration of
gold metals on the 687-hectare concession
This official government license, which provides the rights to perform a general
survey and explore for gold and other metals on the Concession, is provided in
EXHIBIT II which is attached to this Agreement.
For purposes of this Transaction, MR. T. JUSRI DJAMAL, as Direktur Utama of PT
Walea Bahimas Mas, has been granted the complete and/or official authorization,
through a General Shareholder's Meeting (subject to stated provisions in the
Company's Articles of Association), to sell 80% of Walea Bahimas's interest in
the Concession, including the full and complete transfer of the government
rights to explore for gold and other metals on the Concession. These official
authorizations for Mr. Djamal are referenced in EXHIBIT III, which is attached
to this Agreement. Although Walea Bahimas will actively seek to obtain the
additional government licenses for the commercial exploitation of gold and other
metals (including the licenses for the refinery, production, transportation,
Telen Gold Mining Concession 2
<PAGE> 71
and sale of gold), Walea Bahimas recognizes that these additional government
licenses will also be transferred to Kalimas or to some third party which is
appointed by Kalimas. To date, Walea Bahimas has secured the government license
for the general survey and exploration of gold and other metals on the
Concession as referenced in Exhibit II. This government license is currently
valid and is in the legal form of a Kuasa Pertambangan (KP). The License is
valid for a period of one (1) year and is renewable before maturity.
ADDITIONAL GOVERNMENT LICENSES & EXPANSION OF PROPERTY
Walea Bahimas will cooperate exclusively with Kalimas and/or Kalimas' appointed
third party to expand the scope of the current license to include additional
hectares of land as well as other additional government licenses which are as
follows:
1 - License (KP) for Exploitation
2 - License (KP) for Refinery and Production
3 - License (KP) for Transportation & Sale
Walea Bahimas will use its expert abilities and efforts for obtaining these
additional hectares for mining development as well as additional government
licenses from the DGGM. The purpose of obtaining all of the necessary licenses
is to make it feasible to effectively and efficiently mine the Concession and to
make it into a world-class profitable operation.
Whereas KALIMAS has the ability to provide and/or secure financing to acquire an
80% interest in the Telen Gold Mining Concession and the related government
licenses from Walea Bahimas as well as the ability to develop the Concession
into a world-class mining operation.
Now therefore, the Parties hereto agree as follows:
1. COOPERATION
In accordance with the Government Approvals which have already been granted to
Walea Bahimas, the Parties agree as follows:
1.1 To submit additional application(s), as necessary, to the
DGGM for the licenses and/or mandates to explore for gold and
other precious metals on the Concession as well as commercial
licenses and/or mandates that are associated with refinery,
production, transportation and sale of gold from the
Concession.
1.2 To complete the sale, acquisition, and development of the
Concession.
1.3 To support, develop, and complete the mining operations
Telen Gold Mining Concession 3
<PAGE> 72
2. EXCLUSIVITY
Except as otherwise provided for in this Agreement, the Parties warrant that
they shall cooperate solely and exclusively with each other in connection with
this Gold Mining Project and that none of them shall enter into any agreement
with any other firm or group of firms with respect to any matters related to
this Project without the prior written consent of the other Party and to keep
this information strictly confidential. Further, Walea Bahimas will grant
Kalimas a first right of refusal with respect to any gold mining Concessions
which it may control, influence the sale of, or be able to recommend to Kalimas.
The Parties also warrant that such exclusivity will be respected by those
persons or firms which they may exercise control or with their affiliate in any
manner.
3. SPONSORSHIP
Walea Bahimas shall act as the main sponsor of this Project. In this regard,
Walea Bahimas has already obtained the complete and proper approvals (which are
subject to legal verification) to sell an 80% interest in the Concession, which
includes the full and complete rights to transfer the Government Licenses which
Walea Bahimas has received for the exploration and exploitation of gold and
other precious metals on the Concession. The Licenses which have been granted to
Walea Bahimas as well as all geological and other significant information will
be made available to the Parties on a continual basis. Furthermore, Walea
Bahimas will obtain the other appropriate government licenses associated with
the refinery and production of gold and other metals as well as the licenses for
the transportation and sale of gold and other metals.
4. INITIAL RESPONSIBILITIES
The Parties agree that their responsibilities shall be as follows:
4.1 WALEA BAHIMAS has already secured the proper approvals to
sell an 80% interest in the Telen Concession as well as the
approvals for the full and complete transfer of its rights to
the Concession, which includes the Government Licenses. Upon
the successful completion of the acquisition of the Telen
Concession, Walea Bahimas will continue to assist with the
development of the Project in conjunction with the Parties as
needed. In particular, Walea Bahimas will take all steps
necessary or deemed advisable by Kalimas to secure any and
all additional property as well as other appropriate
government licenses associated with exploration,
exploitation, refinery, production, and transport & sale of
gold and other metals. Walea Bahimas has reviewed preliminary
geological surveys on the Concession and will provide all of
this information as well as all future information to the
Parties on a continual basis.
Telen Gold Mining Concession 4
<PAGE> 73
Walea Bahimas will give Kalimas first priority/option for any
future gold mining opportunities for acquisition and/or for
working together in seeking other gold mining projects. In
particular, Walea Bahimas must give first priority to Kalimas
to acquire any additional Concession which are contiguous
with the current Concession. In those instances where these
contiguous Concession and/or other concession region are
owned and/or controlled by friends, families, and/or
directors of other local PT Companies which are associated
with Walea Bahimas, Walea Bahimas must give priority to
Kalimas to acquire such Concession, if available.
4.2 KALIMAS will be responsible to provide and/or secure
financing for the Project, provide world-class technologies
and management/exploration teams and, if necessary, a
strategic operator(s) to develop the Concession. Kalimas will
jointly assist the Project with Walea Bahimas.
4.3 KALIMAS shall appoint a qualified Indonesian party to accept
the transfer of the licenses issued by the Department of
Mines of the Republic of Indonesia and may at any time at its
discretion cause or permit such party to transfer such
Concession and licenses to any third party based on
prevailing regulations and subject to Walea Bahimas's
continuing rights under the Agreement being respected by such
transferee.
5. TERMS & CONDITIONS FOR SALE & ACQUISITION
5.1 Walea Bahimas will sell an 80% interest in the Concession as
well as transfer its full and complete rights to the
Government License for the general survey and exploration of
gold and other metals on the Concession. Furthermore, Walea
Bahimas's principals and/or affiliates will not compete with
Kalimas.
5.2 Payment For:
(a) Walea Bahimas agrees to sell 80% of its interest in
the Concession as well as its full and complete
rights to the Government Licenses to such qualified
party as indicated by Kalimas that may be appointed
for the price of USD $1,000,000.
(b) All payments hereunder shall be subject to continual
fulfillment by Walea Bahimas of its obligations under
this Agreement.
5.3 Payment Conditions:
(a) Kalimas agrees to make a down payment of USD $150,000
after the signing of this Agreement. This payment,
however, is subject to legal verification that the
title to the Concession is acceptable and without
encumbrances and that the government license issued
to Walea Bahimas is current and valid.
Telen Gold Mining Concession 5
<PAGE> 74
Furthermore, payment is to be made after the survey
test results from the initial
investigation/exploration activity is completed and
any other legal verifications which may be required
in respect of title to the Concession and validity of
government licenses.
(b) The final payment of USD $850,000 will be immediately
paid to Walea Bahimas upon the Gold Mine(s) being put
into the production stage and is generating positive
revenues. For this to occur, however, Walea Bahimas
must first secure the complete and proper government
licenses. Specifically, Walea Bahimas must secure
those additional government licenses which will allow
the Parties to put the Mine(s) into the production
stage. Such government licenses are as follows:
- KP Exploration & Exploitation
- KP Refinery & Production
- KP Transportation & Sale
Walea Bahimas recognizes that once it secures these
licenses for the benefit of the Parties and,
moreover, for the benefit of the Project, Walea
Bahimas will transfer the full and complete rights of
these licenses to Kalimas or to the entity appointed
by Kalimas.
5.4 Profit Sharing/Shareholding
The Parties hereby agree that the Profit Sharing from the net
profit (total revenue minus all expenses including taxes) to
the Project shall be as follows:
Kalimas 80%
Walea Bahimas 20%
The said percentage which is entitled to Walea Bahimas will
be held offshore for the benefit of Walea Bahimas.
5.5 Reimbursement of Expenses
Kalimas agrees to relinquish to or reimburse Walea Bahimas
for the funds which Walea Bahimas expended towards the
Seriousness Bond which it paid to the DGGM for blocking the
687-hectare Concession. These funds amount to a total of Rp.
to be determined. Receipts for these expenses are referenced
in EXHIBIT IV. Terms and Conditions for the reimbursement of
these expenses are to be determined by the Parties.
Telen Gold Mining Concession 6
<PAGE> 75
5.6 Exploration Program
(a) Kalimas agrees to begin the Exploration Program on
the Concession by March/April 1997 or sooner, or at a
time agreed upon by the
Parties:___________________________.
(b) Kalimas will dig numerous test pits as part of the
exploration program.
(c) Shallow drilling to the depth of 50-60 meters will be
carried out over the first 90-day period or at a
practical time.
(d) Deep drilling to the depth of 200 meters will also be
carried out over the second 90-day period or at a
practical time.
(e) Kalimas agrees to provide and/or secure 100% finance
the Exploration Program for the development and
implementation of the Telen Gold Mine. In this
regard, Kalimas agrees to spend a minimum of USD
$100,000 in Year 1; USD $100,000 in Year 2; and USD
$100,000 in Year 3. Accounting records for these
expenditures will be kept by Kalimas.
6. JURISDICTION
6.1 (a) Any dispute or controversies which may arise out of
this Agreement shall be amicably settled by the
Parties, but in failure thereof, such disputes or
controversies shall be referred to the arbitration of
the Rules of Badan Arbitrasi Nasional Indonesia
(BANI). The arbitration panel shall consist of three
(3) arbitrators, one (1) chosen by the complainant,
one (1) chosen by the respondent and a Chairman
chosen by the arbitrators named by the complainant
and the respondent.
(b) The Parties expressly agree that (i) the arbitration
tribunal shall decide the matter as expeditiously as
possible, however no time limits shall be imposed,
(ii) Section 631 of the R.V. (Reglement op de
Rechtsvordering) shall apply, and that accordingly
the arbitrators shall only reach their decision by
applying strict rules of law to the facts and shall
not purport to resolve any dispute ex aequo et bono,
(iii) the arbitration shall be conducted in the
English language, in Jakarta, Indonesia, or such
other place or places in Indonesia as the Parties to
the arbitration may agree, (iv) the Party in whose
favor the arbitral award is rendered shall be
entitled to recover costs and expenses of the
arbitration tribunal including but not limited to the
cost and expense of administration of the arbitration
proceedings, and (v) the arbitral award shall be
issued in Indonesia.
Telen Gold Mining Concession 7
<PAGE> 76
(c) The Parties expressly agree to waive Section 641 of
the R.V. and any other applicable laws permitting
appeal to courts of law or any other body so that
accordingly there shall be no appeal to any court of
law or any other body from the decision (or any
interim decision) of the arbitrators and neither
party shall dispute nor question such decision before
any judicial authority in the Republic of Indonesia
or elsewhere.
(d) Pending the submission to arbitration and thereafter
until the arbitration tribunal issues its decision,
each Party shall, except in the event of expiration,
termination or failure by the other Party to obey or
comply with a specific order or decision of the
arbitration tribunal, continue to perform all of its
obligations under this Agreement without prejudice to
a final adjustment in accordance with the said award.
6.2 This Agreement as to its interpretation and application shall
be governed by the Laws of Indonesia.
6.3 The Parties hereby expressly agree to waive the provision of
Article 1266 of the Indonesian Civil Code with respect to the
need for a court pronouncement to terminate this Agreement.
7. TERM OF VALIDITY
This Agreement shall be in effect as of February 14, 1997, and shall be valid
until the purposes and objectives of the Project have been fulfilled.
If for any reason the transfer of the Concession is not approved by the
Government Authorities within (6) months after the date of this Agreement
Kalimas shall have the option to terminate this Agreement with no further
liability hereunder.
8. OTHER MATTERS
Other matters not stipulated in this Agreement shall be further discussed and
decided later on through mutual discussion between the Parties on the basis of
this Agreement.
Telen Gold Mining Concession 8
<PAGE> 77
In Witness Whereof, the Parties agree that this Agreement is legal and binding
and have caused their duly authorized representatives to execute this Agreement
on the year and date first above stated.
SIGNATORIES
PT WALEA BAHIMAS MAS KALIMAS JAYA LTD.
BY: /S/ BY: /S/
-------------------------- ----------------------------
NAME: NAME: WILLIAM CHAN
TITLE: DIREKTUR UTAMA TITLE: PRESIDENT DIRECTOR
Telen Gold Mining Concession 9
<PAGE> 78
LIST OF EXHIBITS
- - --------------------------------------------------------------------------------
EXHIBIT I: GEOGRAPHICAL DESCRIPTION OF PROPERTY
EXHIBIT II: GOVERNMENT FILINGS AND LICENSE
EXHIBIT III: GENERAL SHAREHOLDERS' MEETING
EXHIBIT IV: REIMBURSEMENT EXPENSES
Telen Gold Mining Concession 10
<PAGE> 79
DEVELOPMENT AGREEMENT
GOLD MINING PROJECT IN EAST KALIMANTAN
THE RIAU GOLD MINING CONCESSION
This Development Agreement (AGREEMENT) is made and entered into on this 14th day
of February, 1977 by and between:
PT AKSARA MUNA ARTHA AND PT WALEA BAHAI MAS, a limited liability company
established and validly existing under Indonesian law, and having its address at
__________________________________-Indonesia (hereinafter referred to as "PT
COMPANY"), and is represented in this Agreement by its Direktur Utama,
___________; and
KALIMAS JAYA LTD, a Bahamas Corporation having its registered offices in the
Bahamas and its representative offices in Singapore (hereinafter referred to as
"KALIMAS"), and is represented in this Agreement by its President Director, Mr.
William Chan.
PT COMPANY and Kalimas are hereinafter referred to collectively as "THE
PARTIES."
WITNESSETH
Whereas, the Government of Indonesia acting through its Department of Mines and
Energy and the Directorate General of General Mining (hereinafter referred to as
the "DGGM") wishes to expand on its enhanced exploration and exploitation for
gold and other precious metals during the next Sixth Development Plan (known as
Repelita VI) and beyond, and encourages the private sector to participate in
such exploration, development, exploitation and production; and
Whereas KALIMAS is actively seeking to acquire gold mining concessions and to
implement gold mining activities in East Kalimantan, Indonesia (hereinafter
referred to as the "PROJECT"); and
Whereas PT COMPANY currently controls a valid government license, known as Kuasa
Pertambangan Penyelidikan Umum and which is listed in official government record
as Number __________, for the general survey and exploration of gold and other
metals on a _________-HECTARE Concession, known as the Riau Gold Mining
Concession in East Kalimantan. PT Company can successfully demonstrate that it
has officially blocked this area of land at the DGGM and that it has also
received a valid license from the DGGM for the general survey and exploration of
gold and other metals on this Concession. PT Company recognizes the importance
of obtaining other government licenses associated with the exploitation of gold
and other metals, for which licenses also include the refinery and production of
gold and other metals as well as the transportation and sale of gold and other
metals; PT Company will use its expert abilities and efforts to obtain these
additional licenses from the government in order to facilitate the development,
implementation, and success of the Project; and
Riau Gold Mining Concession 1
<PAGE> 80
Whereas both Parties agree to use their best efforts to complete the sale,
acquisition, and development of the Riau Gold Mining Concession of two
concessions: Kuantan area 4x2000 Ha. and Sengiangi 3000/Ha. (hereinafter
referred to as the "TRANSACTION"), which includes the rights to the government
license for the general survey and exploration of gold and other metals on the
Concession. The Parties also agree to jointly cooperate to successfully obtain
any and all other government licenses which will be necessary for the success of
the Project; and
whereas the Riau Gold Mining Concession (hereinafter referred to as the
"CONCESSION") is located in Sumatera, Indonesia, and, potentially, has
substantial deposits of gold and other precious metals. The Concession
encompasses mining authorizations with respect to approximately _____ hectares
of land. A geographical description of the Concession is provided in EXHIBIT I,
which is attached to this Agreement. The Concession is located in a gold
mineralization zone and, more importantly, is ____ km to the ___ of the famous
____________ Gold Mining Concession which - to date - has approximately ______
million ounces of gold and is still under further exploration. Through official
filings and monetary payments made to the DGGM (which includes both filing and
annual fees as well as seriousness bonds), PT Company has secured the rights to
the Concession as well as the government licenses for the general survey and
exploration of gold on the Concession. These documents and,most importantly, a
copy of the KP License obtained by PT Company are shown and, most importantly, a
copy of the KP License obtained by PT Company are shown win EXHIBIT II, which is
attached to this agreement.
DESCRIPTION OF THE CONCESSION ***** HECTARES IN RIAU SUMATERA
The Concession consists of approximately _____ hectares of land. An official
government license has been issued in respect of the Concession and permits PT
Company to perform a general survey and explore for gold and other metals on the
Concession. The License which was issued is delineated as follows:
1- KUASA PERTAMBANGAN EKSPLORASI/EKSPLOTIESI
No. ____________________________
Issued on _________ to PT ______________
This license is for the general survey and exploration of gold
metals on the ____-hectare concession
This official government license, which provides the rights to perform a general
survey
(However, the area could be expanded
up to 5000 Ha.)
Riau Gold Mining Concession 2
<PAGE> 81
transportation, and sale of gold), PT Company recognizes that these additional
government licenses will also be transferred to Kalimas or to some third party
which is appointed by Kalimas. To date, PT Company has secured the government
license for the general survey and exploration of gold and other metals on the
concession as referenced in Exhibit II. This government license is currently
valid and is in the legal form of a Kuasa Pertambangan (KP). The License is
valid for a period of one (1) year and is renewable before maturity.
ADDITIONAL GOVERNMENT LICENSES & EXPANSION OF PROPERTY
PT Company will cooperate exclusively with Kalimas and/or Kalimas' appointed
third party to expand the scope of the current license to include additional
hectares of land as well as other additional government licenses, which are as
follows:
1- License (KP) for Exploitation
2- License (KP) for Refinery and Production
3- License (KP) for Transportation & Sale
PT Company will use its expert abilities and efforts for obtaining these
additional hectares for mining development as well as additional government
licenses from the DGGM. The purpose of obtaining all of the necessary licenses
is to make it feasible to effectively and efficiently mine the Concession and to
make it into a world-class profitable operation.
Whereas KALIMAS has the ability to provide and/or secure financing to acquire
______ interest in the Riau Gold Mining Concession and the related government
licenses from PT Company as well as the ability to develop the Concession into a
world-class mining operation.
Now therefore, the Parties hereto agree as follows:
1 COOPERATION
In accordance with the Government Approvals which have already been granted to
PT Company, the Parties agree as follows:
1.1 To submit additional application(s), as necessary, to the
DGGM for the licenses and/or mandates to explore for gold and
other precious metals on the Concession as well as commercial
licenses and/or mandates that are associated with refinery,
production, transportation and sale of gold from the
Concession.
1.2 To complete the sale, acquisition, and development of
Concession
1.3 To support, develop, and complete the mining operations
Riau Gold Mining Concession 3
<PAGE> 82
2 EXCLUSIVITY
Except as otherwise provided for in this Agreement, the Parties warrant that
they shall cooperate solely and exclusively with each other in connection with
this Gold Mining Project and that none of them shall enter into any agreement
with any other firm or group of firms with respect to any matters related to
this Project without the prior written consent of the other Party and to keep
this information strictly confidential. Further, PT Company will grant Kalimas a
first right of refusal with respect to any gold mining Concessions which it may
control, influence the sale of, or be able to recommend to Kalimas.
The Parties also warrant that such exclusivity will be respected by those
persons or firms which they may exercise control or with their affiliate in any
manner.
3 SPONSORSHIP
PT Company shall act as the main sponsor of this Project. In this regard, PT
Company has already obtained the complete and proper approvals (which are
subject to legal verification) to sell an ___ interest in the Concession, which
includes the full and complete rights to transfer the Government Licenses which
PT Company has received for the exploration and exploitation of gold and other
precious metals on the Concession. The Licenses which have been granted to PT
Company as well as all geological and other significant information will be made
available to the Parties on a continual basis. Furthermore, PT Company will
obtain the other appropriate government licenses associated with the refinery
and production of gold and other metals as well as the licenses for the
transportation and sale of gold and other metals.
4. INITIAL RESPONSIBILITIES
The Parties agree that their responsibilities shall be as follows:
4.1 PT COMPANY has already secured the proper approvals to sell an
interest in the Riau Concession (1) Sengingi $ to be
negotiated 20%, (2) Kuantan $250k 20%, as well as
approvals for the full and complete transfer of its rights to
the Concession which includes the Government Licenses. Upon
the successful completion of the acquisition of the Riau
Concession, PT Company will continue to assist with the
development of the Project in conjunction with the Parties as
needed. In particular, PT Company will take all steps
necessary or deemed advisable by Kalimas to secure any and all
additional property as well as other appropriate government
licenses associated with exploration, exploitation, refinery,
production, and transport & sale of gold and other metals. PT
Company has reviewed preliminary geological surveys on the
Concession and will provide all of this information as well as
all future information to the Parties on a continual basis.
Riau Gold Mining Concession 4
<PAGE> 83
PT Company will give Kalimas first priority option for any
future gold mining opportunities for acquisition and/or for
working together in seeking other gold mining projects. In
particular, PT Company must give first priority to Kalimas to
acquire any additional Concession which are contiguous with
the current Concession. In those instances where these
contiguous Concession and/or other Concession region are
owned and/or controlled by friends, families, and/or
directors of other local PT Companies which are associated
with PT Company, PT Company must give priority to Kalimas to
acquire such Concession, if available.
4.2 KALIMAS will be responsible to provide and/or secure
financing for the Project, provide world-class technologies
and management exploration teams and, if necessary, a
strategic operator(s) to develop the Concession. Kalimas will
jointly assist the Project with PT Company.
4.3 Kalimas shall appoint a qualified Indonesian party to accept
the transfer of the licenses issued by the Department of
Mines of the Republic of Indonesia and may at any time at its
discretion cause or permit such party to transfer such
Concession and licenses to any third party based on
prevailing regulations and subject to PT Company's continuing
rights under the Agreement being respected by such
transferee.
6. TERMS & CONDITIONS FOR SALE & ACQUISITION
5.1 PT Company will sell an 80% interest in the Concession as
well as transfer its full and complete rights to the
Government License for the general survey and exploration of
gold and other metals on the Concession. Furthermore, PT
Company's principals and/or affiliates will not compete with
Kalimas.
5.2 Payment For:
(a) PT Company agrees to sell 80% of its interest in the
Concession as well as its full and complete rights to
the Government Licenses to such qualified party as
indicated by Kalimas that may be appointed for the
price of USD $ To Be Negotiated
5.3 Payment Conditions:
(a) Kalimas agrees to make a down payment of USD $ (a)
Sengingi $ TO BE NEGOTIATED (b) Kuantang $250,000
after the signing of this Agreement. This payment,
however, is subject to legal verification that the
title to the Concession is acceptable and without
encumbrances and that the government license issued
to PT Company is current and valid. Furthermore,
Riau Gold Mining Concession 5
<PAGE> 84
payment is to be made after the survey test results
from the initial investigation exploration activity
is completed and any other legal verifications which
may be required in respect of title to the Concession
and validity of government licenses.
(b) The final payment of USD $ TO BE NEGOTIATED will be
immediately paid to PT Company upon the Gold Mine(s)
being put into the production stage and is generating
positive revenues. For this to occur, however, PT
Company must first secure the complete and proper
government licenses. Specifically, PT Company must
secure those additional government licenses which
will allow the Parties to put the Mine(s) into the
production stage. Such government licenses are as
follows:
- KP Exploration & Exploitation
- KP Refinery & Production
- KP Transportation & Sale
PT Company recognizes that once it secures these
licenses for the benefit of the Parties and,
moreover, for the benefit of the Project, PT Company
will transfer the full and complete rights of these
licenses to Kalimas or to the entity appointed by
Kalimas.
5.4 Profit Sharing
The Parties hereby agree that the Profit Sharing from the net
profit (total revenue minus all expenses including taxes) to
the Project shall be as follows:
Kalimas 80%
PT Company 20%
* The said percentage which is entitled to PT Company will be
held offshore for the benefit of PT Company.
5.5 Reimbursement of Expenses
Kalimas agrees to relinquish to or reimburse PT Company for
the funds which PT Company expended towards the Seriousness
Bond which is paid to the DGGM for blocking the 68-hectare
Concession. These funds amount to a total of Rp. TO BE
DETERMINED Receipts for these expenses are referenced in
EXHIBIT IV. Terms and Conditions for the reimbursement of
these expenses are to be determined by the Parties.
Riau Gold Mining Concession 6
<PAGE> 85
5.6 Exploration Program
(a) Kalimas agrees to begin the Exploration Program on
the Concession by March April 1997 or sooner, or at a
time agreed upon by the
Parties:_______________________.
(b) Kalimas will dig numerous test pits as part of the
exploration program.
(c) Shallow drilling to the depth of 50-60 meters will be
carried out over the first 90-day period or at a
practical time.
(d) Deep drilling to the depth of 200 meters will also be
carried out over the second 90-day period or at a
practical time.
(e) Kalimas agrees to provide and/or secure 100% finance
the Exploration Program for the development and
implementation of the Riau Gold Mine. In this regard,
Kalimas agrees to spend a minimum of USD $100,000 in
Year 1; USD $100,000 in Year 2; and USD $100,000 in
Year 3. Accounting records for these expenditures
will be kept by Kalimas.
6. JURISDICTION
6.1 (a) Any dispute or controversies which may arise out of
this Agreement shall be amicably settled by the
Parties, but in failure thereof, such disputes or
controversies shall be referred to the arbitration of
the Rules of Badan Arbitrasi Nasional Indonesia
(BANI). The arbitration panel shall consist of three
(3) arbitrators, one (1) chosen by the complainant,
one (1) chosen by the respondent and a Chairman
chosen by the arbitrators named by the complainant
and the respondent.
(b) The Parties expressly agree that Ii) the arbitration
tribunal shall decide the matter as expeditiously as
possible, however, no time limits shall be imposed,
(ii) Section 631 of the R.V. (Reglement op de
Rechtsvordering) shall apply, and that accordingly
the arbitrators shall only reach their decision by
applying strict rules of law to the facts and shall
not purport to resolve any dispute ex aequo et bono,
(iii) the arbitration shall be conducted in the
English language, in Jakarta, Indonesia, or such
other place or places in Indonesia as the Parties to
the arbitration may agree, (iv) the Party in whose
favor the arbitral award is rendered shall be
entitled to recover costs and expenses of the
arbitration tribunal including but not limited to the
cost and expense of administration of the arbitration
proceedings, and (v) the arbitral award shall be
issued in Indonesia.
Riau Gold Mining Concession 7
<PAGE> 86
(c) The Parties expressly agree to waive Section 641 of
the R.V. and any other applicable laws permitting
appeal to courts of law or any other body so that
accordingly there shall be no appeal to any court of
law or any other body from the decision (or any
interim decision) of the arbitrators and neither
party shall dispute nor question such decision before
any judicial authority in the Republic of Indonesia
or elsewhere.
(d) Pending the submission to arbitration and thereafter
until the arbitration tribunal issues its decision,
each Party shall, except in the event of expiration,
termination or failure by the other Party to obey or
comply with a specific order or decision of the
arbitration tribunal, continue to perform all of its
obligations under this Agreement without prejudice to
a final adjustment in accordance with the said award.
6.2 This Agreement as to its interpretation and application shall
be governed by the Laws of Indonesia.
6.4 The Parties hereby expressly agree to waive the provision of
Article 1266 of the Indonesian Civil Code with respect to the
need for a court pronouncement to terminate this Agreement.
7 TERMS OF VALIDITY
This Agreement shall be in effect as of February 14th, 1997, and shall be valid
until the purposes and objectives of the Project have been fulfilled.
If for any reason the transfer of the Concession is not approved by the
Government Authorities within (6) months after the date of this Agreement
Kalimas shall have the option to terminate this Agreement with no further
liability hereunder.
8 OTHER MATTERS
Other matters not stipulated in this Agreement shall be further discussed and
decided later on through mutual discussion between the Parties on the basis of
the Agreement.
Riau Gold Mining Concession 8
<PAGE> 87
In Witness Whereof, the Parties agree that this Agreement is legal and binding
and have caused their duly authorized representatives to execute this Agreement
on the year and date first above stated.
SIGNATORIES
PT KALIMAS JAYA LTD
--------------------
BY: /S/ BY: /S/
------------ ------------
NAME: NAME: WILLIAM CHAN
TITLE: DIREKTUR UTAMA TITLE: PRESIDENT DIRECTOR
The final agreements will be presented to Mr. Usri on the week of 17th February
'97 in Jakarta for final signature.
/s/
Riau Gold Mining Concession 9
<PAGE> 88
LIST OF EXHIBITS
- - --------------------------------------------------------------------------------
EXHIBIT I: GEOGRAPHICAL DESCRIPTION OF PROPERTY
EXHIBIT II: GOVERNMENT FILINGS AND LICENSE
EXHIBIT III: GENERAL SHAREHOLDERS' MEETING
EXHIBIT IV: REIMBURSEMENT EXPENSES
Riau Gold Mining Concession 10
<PAGE> 1
EXHIBIT 10(XXII)
November 11, 1996
MADEIRA INTEX, S.A. INT'L EXPORTS
Mr. Ignatius "Eddy" Zapheirius Theodorou, Chairman of the Board
101, 3rd Septemvriou
Athens, 104 34, Greece
RE: EQUITORIAL RESOURCES
Dear Eddy:
This letter will confirm our understanding with respect to the
contribution, to Equitorial Resources, a British Virgin Islands Corporation, of
certain assets, materials and resources described in your Joint Venture
Agreement, dated June 29, 1984 (copy attached), with Companhia Agropecuaria Do
Rio Jabuti (Jonasa group) and ancillary related agreements. Equitorial Resources
will be a partially-owned subsidiary of Nevada Manhattan Mining, Inc. (NVMH).
It is our mutual intent to develop and exploit the timber and other
concessions outlined in the above-mentioned agreement under the newly formed
Equitorial Resources. We may jointly elect to contribute additional properties
to Equitorial Resources which may become available.
It is agreed that Messrs. Christopher Michaels ("CM"), Jeffrey Kramer
("JK") and Ignatius Z. Theodorou ("IT") will be designated "key men" to this
agreement with the understanding that the conveyance of any assets under your
agreement, dated June 29, 1984, as described above, to Equitorial
<PAGE> 2
Page 2
November 9, 1996
Resources will be subject to CM, JK and IT's position with Equitorial Resources
being confirmed and maintained to our mutual agreement. It is also understood
that CM and JK's current position with NVMH will also be subject to this "key
man" clause.
Each party signing this document warrants that he has the full power
and authority to execute same on behalf of his respective corporation(s).
Please execute where provided below.
Accepted and Agreed:
/s/ /s/
Ignatius Z. Theodorou Christopher D. Michaels
for Madeira Intex S.A. & for NVMH and Equitorial Resources
Equitorial Resources
/s/
Jeffrey S. Kramer
for NVMH & Equitorial Resources
<PAGE> 3
JOINT VENTURE
This agreement is made on June 29, 1984, between the first party "MADEIRA INTEX
S.A. INTERNATIONAL EXPORTS" a company duly formed legalized and constituted in
accordance to the laws of the Greek Democratic Republic, having its registered
Head Office in Athens, Greece at 101, 3rd Septembriou St. duly represented by
Mr. Ignatius Zapheirius Theodorou, Chairman of the Board and Mr. Carlos Gomes da
Rocha, Director, hereinafter called "MADEIRA INTEX", and the second party
"COMPANHIA AGROPECUARIA DO RIO JABUTI" (Jonasa Group), a company duly formed
legalized and constituted in accordance to the laws of the Federative Republic
of Brazil registered under CGC / MF - 055.11399/0001-99, having its registered
Head Office at Rua Professor Nelson Ribeiro, 161, Belem, Brazil duly represented
by Mr. Francisco Joaquim Fonseca, Director President and Mr. Roberto Seixas
Simoes, Administrative Director, hereinafter called "JONASA".
WHEREAS the party JONASA is the legal owner of an agricultural area in the
amount of 100.000 hectare in the State of Para, located in the Amazon Forest.
WHEREAS the party JONASA has a legal permission to extract in his own property
13.000.000 m3 cubic meters of lumber. The said permission is issued by the
Brazilian authorities and allows the exports of lumber in logs and sawn lumber
of restricted species.
WHEREAS the party MADEIRA INTEX has the means and ways to provide JONASA
expertise know how, for extraction of forestry products, to protect, preserve,
to ship, to manufacture wood products, to market, and sell the said products, as
well as own ports facilities for storage abroad.
WHEREAS MADEIRA INTEX will financially help JONASA to extract these species
permitted, protect, preserve, inspect, and ship them, accordingly to the
internationally accepted practices for logs or sawn lumber commercialization.
WHEREAS both parties mutually agreed to form this Joint Venture for their common
interest, under following terms and conditions:
<PAGE> 4
ARTICLE 1 (DEFINITIONS)
1.1 The following definitions are applicable to this Agreement.
Agreement - Is the set of articles of terms and conditions
agreed upon with the common will between the parties.
Lumber - Is the basic raw material in logs from the Amazon
Forests of Brazil supplied by the Seller to be
purchased by the Buyer.
m3 - Is the amount of lumber as measured by the
geometrical method of measuring lumber in Brazil.
cm - Is centimeter.
Year - Is the period of 12 months which starts in January
1st and ends December 31st.
U.S.$ - Is the United States Dollars.
ETA - Is the estimated time of arrival of vessel.
Lay days - Is the period of time from the arrival of vessel
until the completion of loading.
F.O.B. - Is the term of sale of lumber and means that lumber
is stowed and lushed at Sellers risk and account.
Depot - Designated areas where lumber is collected in order
to inspect and transport to loading ports.
A.T.I.B.T.- Is the Association Technique International des Bois
Tropicaux.
ARTICLE 2 (PURPOSE)
The purpose of this agreement is that JONASA will provide the exclusive
concessions to MADEIRA INTEX for extracting and marketing the amount of m3's
licensed by the Brazilian authorities for export. MADEIRA INTEX will provide
finance for the management and marketing of species permitted and located on
JONASA's own property. As well as assuming the responsibility for management of
cutting, preserving, protect, inspect and ship according to international rules
of A.T.I.B.T.
ARTICLE 3 (DOCUMENTATION)
All documents listed below are an integrant part of the agreement.
3.1. Annex I and II list of Species.
3.2. Annex III copy of A.T.I.B.T. rules of classification of log issued by
the Association Technique des Bois Tropicaux.
3.3. Annex IV Extract of the meeting of the Board of Directors of MADEIRA
INTEX S.A. authorizing the signature of the agreement with Seller.
<PAGE> 5
3.4. Copies of authorization by the Seller for the signature of this
agreement with the Buyer Annex V.
3.5. Annex VI copy of shipping and loading terms F.O.B. MADEIRA INTEX terms)
3.6. Annex VII copy of the Resolution permitting the exports of lumber in
logs from CACEX - Brazil.
3.7. Annex VIII copy of the rules for the preservation of the log during
transit period, under MADEIRA INTEX management and responsibility.
ARTICLE 4 (DURATION)
This agreement is set for the period needed to extract 13.000.000 m3 from an
area of 100.000 hectares. At that time MADEIRA INTEX will provide expert know
how and finance to replant the whole are which has been cut, under their
management with mutual agreement.
ARTICLE 5 (OBLIGATIONS OF JONASA)
5.1. The obligation of JONASA is to submit evidence of deed of property, and
export license from the proper authorities for log export.
5.2. Cost estimative for extraction including, labor cost, transportation,
cutting equipment, communication equipment and housing and offices for
5-10 persons.
5.3. Working permits for 5-10 expertise in forestry.
5.4. To provide labor hands, transportation, cutting equipment, offices and
houses.
5.5. To obey all ecological laws of the country.
5.6. The obligation of JONASA is to assist this Joint Venture in a true
commercial partnership.
ARTICLE 6 (OBLIGATION OF MADEIRA INTEX)
6.1. To provide finance for labor hands, for transportation, and cutting
equipment for 5-10 expertise, telecommunication equipment with the
MADEIRA's expertise approval.
6.2. All equipment will be on a leasing basis. Always with the approval of
MADEIRA INTEX experts.
6.3. To purchase all lumber to be cut in the amount of 13.000.000 m3
approximately.
<PAGE> 6
6.4. Payment for purchase will be Letter of Credit payable on sight upon
presentation of necessary documents and approved by MADEIRA INTEX
expert, which will be expressed in the L/C.
6.5. Provide irrevocable, revolving, transferable, Letter of Credit covering
the minimum amount of 60.000 m3 for the agreed U.S.$90 per cubic meter
on F.O.B. basis (Incoterms 1980), and revolving automatically for each
shipment MADEIRA INTEX purchased.
6.6. Letter of Credit to provide advance payment for cutting, preservation,
and stevedoring costs for each shipment, payable with the approval of
MADEIRA INTEX expert.
6.7. MADEIRA INTEX to be sole responsible for, quantity, quality inspection,
preservation, protection and shipping under the A.T.I.B.T. rules and
MADEIRA INTEX experts management.
6.8. MADEIRA INTEX is the sole responsible for supervising loading of the
vessel under F.O.B. Incoterms 1980, and to ship logs to any port in the
world.
ARTICLE 7 (QUANTITIES)
The minimum quantity to be purchased by MADEIRA INTEX is 60.000 m3 (cbm) per
year.
ARTICLE 8 (PRICES AND VALUE OF THE AGREEMENT)
8.1. The basic total estimated value of this agreement per year is
U.S.$5,400,000.00 (Five million four hundred thousand dollars).
8.2. MADEIRA INTEX shall pay and JONASA shall accept payment for the lumber
sold and purchased according to Article 6.5. herefore at the following
prices:
8.2.1. A) Merchantable quality U.S. $90 per cubic meter of lumber in
logs.
B) Fair average quality U.S. $80 per cubic meter of lumber in
logs.
C) Second quality...... U.S. $67 per cubic meter of lumber in
logs.
Above prices applicable for the species indicated in Annex I
- List A.
<PAGE> 7
ARTICLE 9 (PRICE REVISIONS)
9.1. Applicable prices are to be revised annually for article 8.2. (Prices
and value of the agreement). The revisions are calculated by JONASA and
notifications is given for the revision to take place to MADEIRA INTEX
at the same time as the establishment of the shipment schedules, 90
days prior to the beginning of the next year and to be in force for the
duration of the next year after the approval of MADEIRA INTEX expert.
9.2. The first revision of prices will take place and will apply for
the year of 1986.
9.3. The revised prices would be calculated according to the arithmetical
average price increase or decrease of the usual international price
variations for same or similar tropical lumber from West Africa,
Central America and Far East originally taken collectively and applied
uniformly.
Example: a) Average annual price increase for the
5 species with largest exports (in amount
of U.S.$) from West Africa say is............... +15%
b) Average annual price increase for the
5 species with largest exports (in amount
of U.S.$) from Central America say is........... +8%
c) Average annual price increase for the
5 species with largest exports (in amount
of U.S.$) from Far East say is.................. +10%
----
Total +30%
We calculate 33 : 3 = 11%
So the prices for each category will be increase by
11%.
ARTICLE 10 (IMPOSSIBILITY OF PERFORMANCE)
10.1. In case that it becomes impossible to effect the exportation of lumber
in logs in whole or for some species due to official regulations
barring such exportation issued by the Government and such regulations
requires and permits all lumber to be exported as sawn wood. JONASA
must fulfill his obligation hereunder in sawn wood proportional to the
amount of lumber in logs agreed upon hereunder and at the prices that
are derived by converting logs locally to sawn wood, such prices and
conditions to be agreed at the time of occurrence of such event to
assure the mutual interest of the parties.
<PAGE> 8
10.2. The new agreement that will have to be reached in this case shall
conform at all respect with the present agreement taking into account
the conditions that prevail at the moment regarding only prices.
ARTICLE 11 (FORCE MAJEURE)
11.1. No default shall result in case the non-performance is due Force
Majeure, defined as such the necessary event, the effect of which are
unavoidable and unpredictable. Force Mejeure shall include natural
catastrophes, wars, major strikes and riots, acts of God, etc. It also
would be considered Force Majeure, to the extent in which barge or ship
transportation are on strike, the events held to the Force Majeure
under the pertinent charter parties.
11.2. Once a Force Majeure event occurred, the party intending to allege it
must notify the other in writing, no later than two days after the
moment the effect of the Force Majeure have begun to be felt.
11.3. In case a Force Majeure event lasts for more than six months, the
parties shall meet to ascertain the way to solve the problem; if after
sixty days from the one hundred and eightieth day of the event no new
agreement is reached, either party has the right to notify the other
party of the termination of this agreement, which termination shall be
in force form time of the receipt of the notification. No party shall
be held in default by reason of such termination.
ARTICLE 12 (TERMINATION)
This agreement is to be held terminated:
12.1. In whole or in part by mutual agreement.
12.2. As indicated in Article 11 (Force Majeure).
12.3. As indicated in Article 4 (Duration).
12.4. By the demand of bankruptcy or receivership of any one party or for any
equivalent remedy under the pertinent law enable the other party to
terminate this agreement by means of notifications stating such intent.
In this case the agreement would be terminated s from the date of the
receipt of the notifications.
<PAGE> 9
12.4. The parties agreed that the termination of this agreement should be
sought after as a last resort and in cases of disputes or doubts
arising during the executions of this agreement they will try to
resolve differences by mutual consultations and negotiations in good
will and spirit.
ARTICLE 13 (ASSIGNMENT)
Assignment of this agreement or of any benefit issuing herefrom shall only be
effected after the other party's authorization. All authorized assignees shall
be held to have accepted all terms and conditions hereof, specially the
assignor's obligations. Giving this Agreement in pledge or guarantee of any
obligations shall be contingent to the other party's authorization, which shall
not be unreasonably withheld.
ARTICLE 14 (ALTERNATIONS TO AGREEMENT)
All alteration to this agreement which may be necessary to be done for
corrections or better functions will always be effected by additional addendums.
ARTICLE 15 (ARBITRATION)
15.1 The disputes arising from defaults and non-performance of this
agreement and for any other reason should be decided by arbitration
under the International Chamber of the Commerce, Geneva - Switzerland
Rules.
15.2. This agreement will be in force during the arbitration time span.
15.3. The cost of arbitration shall be born by the party in default or by the
party that causes the arbitration proceedings.
ARTICLE 16 (COURTS OF JURISDICTION)
In the interpretation of this agreement the laws of the State of California,
United States of America and Rio de Janeiro, Brazil shall apply. (British law is
also acceptable.)
<PAGE> 10
101, 3rd Septemvriou St.,
Athens - Greece
- - -JOAQUIM FONSECA NAVEGACAO, INDUSTRIA E COMERCIO S.A.
Rua Professor Nelson Ribeiro no 161
Belem - Brazil
17.3. The parties shall act in all circumstances in an adequate business like
manner in such a way to protect the mutual interest.
17.4. The date of execution hereof is the day in which both parties sign this
agreement or, in case it is signed in different days, the day of
receipt of a notification stating that the signing was completed by the
last signing party.
17.5. This agreement will be considered as being in force with full
implementation of each and all terms and conditions described
henceforth when the first shipment of logs is loaded.
17.6. The waiver of any obligations hereunder shall not be understood as
extending to any other obligation or to the same obligation at any
other occasion, nor shall it be interpreted as a tacit alteration
hereof.
17.7. One copy of this agreement shall be notarized by each party in
accordance with the law of his respective country. The notarized copies
shall be exchanged between the two parties.
This agreement existing in six (6) original copies in the English language is
signed by the authorized representatives of each party in the presence of the
witnesses this 29th day of June in the year of 1984 each party taking three (3)
original copies of the Agreement.
FOR COMPANHIA AGROPECUARIA DO RIO JABUTI
- - ----------------------------------------
Francisco Joaquim Fonseca
President Director
<PAGE> 11
/s/
Roberto Seixas Simoes
Administrative Director
FOR MADEIRA INTEX S.A. INTERNATIONAL EXPORTS
/s/
Ignatius Zapheirius Theodorou
Chairman of the Board
/s/
Carlos Gomes da Rocha
Director
WITNESSES:
1. /s/
2. /s/
<PAGE> 12
ANNEX I
SPECIES
<TABLE>
<CAPTION>
Regional Denomination Botanic Denomination Annual % ap
- - --------------------------------------------------------------------------------
<S> <C> <C>
================================================================================
FAVEIRO Pterodon Pubescens 10%
- - --------------------------------------------------------------------------------
MANDIOQUEIRO Qualea Albiflora 10%
- - --------------------------------------------------------------------------------
ANGELIM PEDRA Hymenolobium Petraeum 9%
- - --------------------------------------------------------------------------------
ANGELIM VERMELHO Dinizia Excelsa 12%
- - --------------------------------------------------------------------------------
TATAJUBA Bagassa Guianensis 10%
- - --------------------------------------------------------------------------------
JATOBA Hymenaea Courbaril 10%
Hub.
- - --------------------------------------------------------------------------------
PAU AMARELO Euxilophora Paraensis 9%
- - --------------------------------------------------------------------------------
SAMAUMA Ceiba Petandra 5%
Gaernt.
- - --------------------------------------------------------------------------------
ASSACU Hura Crepitans L. 5%
- - --------------------------------------------------------------------------------
CUMARU Dipterix Odorata 5%
- - --------------------------------------------------------------------------------
QUARUBA Vochysia Spp. 3%
- - --------------------------------------------------------------------------------
CEDRORANA Cedrelinga 3%
Catanaeformis
- - --------------------------------------------------------------------------------
MUIRACATIARA Astronium Lecointei 2%
- - --------------------------------------------------------------------------------
LOURO VERMELHO Nectandra Rubra 2%
- - --------------------------------------------------------------------------------
COPAIBA Copaifera Ducke 1%
- - --------------------------------------------------------------------------------
AMESCLAO Protium Heptaphyllum 2%
- - --------------------------------------------------------------------------------
CAJU-ASSU Anacardium Giganteum 1%
- - --------------------------------------------------------------------------------
MOROTOTO Didymopanax 1%
Morototoni
================================================================================
</TABLE>
<PAGE> 13
TO WHOM IT MAY CONCERN
LETTER OF CREDENTIALS AND AUTHORIZATION
It is hereby certified that the bearer of this letter Mr. Ignatius Theodorou is
the Chairman of the Board of the company MADEIRA INTEX SA, a Societe Anonyme,
duly incorporated under the law of Greece.
Mr. Theodorou is duly authorized by decision of the Board of Directors of said
company to act on behalf of the company and to come to agreements with regards
to the supply and purchase of Brazilian Companies or individuals or Consortiums,
as well as with any company or party acting on behalf or in relation to such
above-mentioned parties.
Mr. Theodorou is also authorized by the same decision of the Board of Directors
to act on behalf of the company and to come to agreements with regards to joint
ventures, concessions for logging and any other related business transactions.
Mr. Theodorou together with Mr. Carlos Gomes da Rocha, another director of the
company, are also authorized and empowered by the same decision of the Board of
Directors to sign any such agreements or addendum to previous signed agreements
on behalf of the company. All signed agreements are subject to ratification by
the Board of Directors of the company.
This letter signed by the authorized officers of MADEIRA INTEX S.A.
/s/ /s/
E. Theodorou C. Martzouoos
Chairman M. Director
<PAGE> 14
ADDENDUM ONE TO THE JOINT VENTURE
1A) It is the understanding of both parties that the Concession suppliers
obligation to MADEIRA INTEX is only limited to the ARTICLE 5
(OBLIGATIONS OF JONASA) of this Joint Venture.
1B) All other terms regarding shipping, inspection and classification has
been added to this Agreement by MADEIRA INTEX for the International
Commercialization of the Lumber to be extracted from the suppliers own
property, since MADEIRA INTEX is responsible for sales and marketing of
the said lumber.
1C) It is agreed by JONASA that the daily loading rate will be of 1.000 m3
and further shipping details to be agreed at a later date.
1D) The price revisions also to be adjusted in accordance to the local
prevailing conditions whenever it's necessary. Otherwise clause 9.3
shall apply.
1E) JONASA hereby agrees to contract third parties in the area for
supplying wood to MADEIRA INTEX in exclusive basis.
Belem, June 29, 1984
FOR COMPANHIA AGROPECUARIA DO RIO JABUTI
/s/
Francisco Joaquim Fonseca
President Director
/s/
Roberto Seixas Simoes
Administrative Director
FOR MADEIRA INTEX S.A. INTERNATIONAL EXPORTS
/s/
Ignatius Zaheirius Theodorou
Chairman of the Board
/s/
Carlos Gomes da Rocha
Director
<PAGE> 15
MANAGEMENT AND MARKETING AGREEMENT
It is agreed by the two (2) parties, the first being UNITED AMAZONIAN RESOURCES
LIMITED, with HEAD OFFICE at GUERNSEY, 7 New Street, Lyric House, St. Peter
Port, Chanel Island, with OPERATION OFFICE at 101, Septemvriou St., Athens
10434, Greece, from now on called U.A.R. and the second part JONASA - JOA - QUIM
FONSECA, NAVEGACAO, INDUSTRIA E. COMERCIO S/A., with HEAD OFFICE at Rua
Professor Nelson Ribeiro, 161, Belem, State of Para, Brazil, from now on called
JONASA, that further to the agreement of JOINT VENTURE signed on June 29, 1984,
the two parties agreed to sign a MANAGEMENT AND MARKETING AGREEMENT, in order
both parties to assure one another to maintain the obligations and conditions of
the JOINT VENTURE AGREEMENT dated, June 29, 1984. Since U.A.R. and their experts
have the means, conditions and qualify experts on their fields of specialty, and
willing to provide JONASA with the above said service free of any charges, and
with JONASA's acceptance and with the following conditions:
1. U.A.R. will provide the necessary expertise to manage all the operation
of JONASA, for forestry, farming, mining, live stock, and industrial
manufacturing of wood products on their own land or any other land to
be purchased by JONASA.
U.A.R. undertakes the responsibility to provide the qualify experts for
all and each of the above operations, at the same time will provide the
financing for each project as deems necessary, provided the JONASA will
give to U.A.R. irrevocable, none transferrable, and none conditional
management without any interference upon the signature of this
agreement.
2. U.A.R. with their experts know-how will undertake to meet all necessary
scheduling, according to the contractual obligations for each project
that JONASA will assume and U.A.R. will procure on behalf of JONASA on
international basis.
U.A.R. will provide the programming scheduling for production and
delivery on time, according with contracts that U.A.R. will assume on
behalf of JONASA. At the same time will establish the high quality name
for each product that JONASA will produce and U.A.R. will sale in the
international market, through their experts know-how.
3. U.A.R. will issue through their experts the necessary certificates
(QUALITY, QUANTITY, and ETC.) required by the international market, the
said experts already share a respectable name in the international
market as well as been accepted by various governments, assuring to
maintain the appropriate high standards for the Brazilian products and
respect the Brazilian Laws of Commerce.
U.A.R. will provide JONASA quarterly with a certify accountant
statements of the quantity shipment of each product, alone with all
other necessary documents, to assure JONASA of the correct movements
for all products and assuring therefore JONASA's correct income.
<PAGE> 16
4. U.A.R. with their experts will maintain accrued records for all
equipments. For each operation, regarding dates of purchase,
maintenance, and parts inventory.
In this order will assume proper use and production for the said
equipment for economy and the steady flow of production.
5. U.A.R. and their experts will assure JONASA to meet all loading,
shipping, and delivery dates according to the contractual obligations,
and international shipping terms and conditions. Provided, that there
is none interference from government, JONASA, and force majure clause
as per the JOINT VENTURE AGREEMENT signed and dated, June 29, 1984
(ARTICLE II).
6. JONASA to supply as per U.A.R. experts request, at reasonable time the
required personal (say 48 hours maximum), equipments (say 20 days
maximum), and other reasonable requests in order to meet all terms and
conditions contained in this contract. The said personal and equipment
to be always JONASA's responsibilities for payment, unless other
arrangements with U.A.R. have been agreed and signed previously.
7. U.A.R. will not request any payment from JONASA for the services and
expertise provided by this contract. However JONASA will provide
housing, transportation, communication equipments, and all necessary
documents required by Brazilian Government for alien experts to be
stationed in the facilities of each project. U.A.R. to train personal
to be provided by JONASA, for upgrading and management positions to be
assumed by them for each project that this contract is covering.
8. This contract to be valid for the period of each JOINT VENTURE
AGREEMENT, U.A.R. and JONASA will cause to sign or already sign and can
only be terminated as per ARTICLE 12 / (TERMINATION) of the JOINT
VENTURE AGREEMENT signed and dated, June 29, 1984.
9. U.A.R. to have first refusal form JONASA for any project to be caused
in the State of Para in the scope of projects covered by this contract
and JONASA to have first refusal from U.A.R. for any project stated
above, for the State of Para in the Federal Republic of Brazil.
It is therefore been accepted and agreed by both parties to sign this agreement
here below.
Belem, July 11, 1985
For JOAQUIM FONSECA, NAVEGACAO, INDUSTRIA E COMERCIO S/A.
/s/
FRANCISCO JOAQUIM FONSECA
PRESIDENT DIRECTOR
/s/
ROBERTO SEIXAS SIMOES
ADMINISTRATIVE DIRECTOR
<PAGE> 17
ADDENDUM THREE TO THE JOINT VENTURE
According to ARTICLE 13 of the JOINT VENTURE between U.A.R. - UNITED AMAZONIAN
RESOURCES LIMITED, dated, June 29, 1984, and ADDENDUM dated, July 10, 1985 it is
hereby mutually agreed that all terms and conditions and addendums of the said
JOINT VENTURE AGREEMENT transferred and assigned, to JONASA - JOAQUIM FONSECA,
NAVEGACAO, INDUSTRIA E COMERCIO S/A., with HEAD OFFICE at Rua Professor Nelson
Ribeiro, 161, Belem, State of Para, Brazil.
Belem, July 11, 1985.
FOR JOAQUIM FONSECA, NAVEGACAO, INDUSTRIA E COMERCIO S/A.
/s/
FRANCISCO JOAQUIM FONSECA
PRESIDENT DIRECTOR
/s/
ROBERTO SEIXAS SIMOES
ADMINISTRATIVE DIRECTOR
FOR UNITED AMAZONIAN RESOURCES LIMITED
/s/
IGNATIUS ZAPHEIRIUS THEODOROU
MANAGING DIRECTOR
/s/
CARLOS GOMES DA ROCHA
DIRECTOR
FOR COMPANHIA AGROPECUARIA DO RIO JABUTT
/s/
FRANCISCO JOAQUIM FONSECA
PRESIDENT DIRECTOR
/s/
ROBERTO SEIXAS SIMOES
ADMINISTRATIVE DIRECTOR
<PAGE> 18
AGREEMENT
It is hereby agreed between JONASA - JOAQUIM FONSECA, NAVEGACAO, INDUSTRIA E
COMERCIO S/A. with HEAD OFFICE at Rua Professor Nelson Ribeiro, 161, Belem,
State of Para, Brazil, from now on called JONASA, and UNITED AMAZONIAN RESOURCES
LIMITED with HEAD OFFICE at Guernsey, 7 New Street, Lyric House, St. Peter Port,
Chanel Island with OPERATION OFFICE at 101, Septemvriou St. Athens 10434,
Greece, from now on called U.A.R., that, the two parties will establish a JOINT
VENTURE AGREEMENT with the purpose of manufacturing and packaging facilities in
Belem, State of Para, Brazil.
The said facilities to engage in activities according to the MANAGEMENT
AGREEMENT, signed, July 11, 1985. Further terms and conditions will be added,
with this agreement both parties accept the three (3) below conditions to be the
foundations of this JOINT VENTURE. The company for the JOINT VENTURE to be named
UNITED AMAZONIAN RESOURCES DO BRASIL.
CONDITIONS:
1. JONASA and BRASAGUA - COMERCIO, EXPORTACAO E PARTICIPACOES LIMITADA,
will establish a company according to the Laws of Brazil, in Belem,
State of Para. This company will purchase the necessary land to built
the said facilities as needed.
2. The said company will produce and purchase all raw materials to be
manufactured as define in the MANAGEMENT AND MARKETING AGREEMENT
signed, July 11, 1985.
3. U.A.R. will undertake the management of the said company, marketing,
promotion, and sales world wide of all the products the said company
will produce on exclusive basis.
U.A.R. will provide all techno-economical studies for the feasibility
and purchase of the necessary machinery and equipment, for the
production of the said products as well as the purchase of the said
equipment.
With the agreement and understanding of both parties, it is hereby signed below.
FOR JOAQUIM FONSECA, NAVEGACAO, INDUSTRIA E COMERCIO S/A.
/s/
FRANCISCO JOAQUIM FONSECA
PRESIDENT DIRECTOR
/s/
ROBERTO SEIXAS SIMOES
ADMINISTRATIVE DIRECTOR
FOR UNITED AMAZONIAN RESOURCES LIMITED
/s/
IGNATIUS ZAPHEIRIUS THEODOROU WITNESSES:
MANAGING DIRECTOR 1. /s/
/s/ 2. /s/
CARLOS GOMES DA ROCHA
DIRECTOR
<PAGE> 19
ADDENDUM FIVE TO THE JOINT VENTURE
Further to the Joint Venture Agreements and all Addendas dully signed,
respectively on June 19, 1984, July 10 and 11, 1985, which documents are all
integrate parts of the original Agreement dated June 29, 1984.
According to the 13th, and 14th Articles of said Agreements, and
according to paragraph 4, in order to upgrade the Ecological part of said
Agreement, a necessary step for the current times, it is hereby agreed, between
the parties involved in said Agreement, to assign and transfer all terms and
conditions of the Agreement to the First Party: AGROPECUARIA RIO JABOTI and
JONASA MADEIRAS, with office address at RUA PROFESSOR NELSON RIBEIRO, 161, in
the city of Belem, State of Para, Brazil, Telephone: (091) 244-4275;
THE SECOND PARTY being EQUATORIAL RESOURCES, partially owned by and a
subsidiary of NEVADA MANHATTAN MINING INC., with office address at 5038 N.
Parkway Calabasas, Calabasas, California, U.S.A., with the Fax number (818)
591-4411 and Phone number (818) 591-4400.
THEREFORE, it is here duly signed and executed by the authorized
directors of the above mentioned companies on this 12th, day of November of the
year 1996.
AUTHORIZED DIRECTOR OF JONASA MADEIRAS & AGROPECUARIA RIO JABOTI
/s/
JOAQUIM LUIZ DA FONSECA NETO
AUTHORIZED DIRECTOR OF EQUATORIAL RESOURCES
/s/
IGNATIUS Z. THEODOROU
WITNESSES
/s/
/s/
<PAGE> 20
MANAGEMENT AND MARKETING AGREEMENT
It is agreed by the two (2) parties, the first being UNITED AMAZONIAN RESOURCES
LIMITED, with HEAD OFFICE at GUERNSEY, 7 New Street, Lyric House, St. Peter
Port, Chanel Island, with OPERATION OFFICE at 101, Septemvriou St., Athens
10434, Greece, from now on called U.A.R. and the second part JONASA - JOA - QUIM
FONSECA, NAVEGACAO, INDUSTRIA E. COMERCIO S/A., with HEAD OFFICE at Rua
Professor Nelson Ribeiro, 161, Belem, State of Para, Brazil, from now on called
JONASA, that further to the agreement of JOINT VENTURE signed on June 29, 1984,
the two parties agreed to sign a MANAGEMENT AND MARKETING AGREEMENT, in order
both parties to assure one another to maintain the obligations and conditions of
the JOINT VENTURE AGREEMENT dated, June 29, 1984. Since U.A.R. and their experts
have the means, conditions and qualify experts on their fields of specialty, and
willing to provide JONASA with the above said service free of any charges, and
with JONASA's acceptance and with the following conditions:
1. U.A.R. will provide the necessary expertise to manage all the operation
of JONASA, for forestry, farming, mining, live stock, and industrial
manufacturing of wood products on their own land or any other land to
be purchased by JONASA.
U.A.R. undertakes the responsibility to provide the qualify experts for
all and each of the above operations, at the same time will provide the
financing for each project as deems necessary, provided the JONASA will
give to U.A.R. irrevocable, none transferrable, and none conditional
management without any interference upon the signature of this
agreement.
2. U.A.R. with their experts know-how will undertake to meet all necessary
scheduling, according to the contractual obligations for each project
that JONASA will assume and U.A.R. will procure on behalf of JONASA on
international basis.
U.A.R. will provide the programming scheduling for production and
delivery on time, according with contracts that U.A.R. will assume on
behalf of JONASA. At the same time will establish the high quality name
for each product that JONASA will produce and U.A.R. will sale in the
international market, through their experts know-how.
3. U.A.R. will issue through their experts the necessary certificates
(QUALITY, QUANTITY, and ETC.) required by the international market, the
said experts already share a respectable name in the international
market as well as been accepted by various governments, assuring to
maintain the appropriate high standards for the Brazilian products and
respect the Brazilian Laws of Commerce.
U.A.R. will provide JONASA quarterly with a certify accountant
statements of the quantity shipment of each product, alone with all
other necessary documents, to assure JONASA of the correct movements
for all products and assuring therefore JONASA's correct income.
<PAGE> 21
4. U.A.R. with their experts will maintain accrued records for all
equipments. For each operation, regarding dates of purchase,
maintenance, and parts inventory.
In this order will assume proper use and production for the said
equipment for economy and the steady flow of production.
5. U.A.R. and their experts will assure JONASA to meet all loading,
shipping, and delivery dates according to the contractual obligations,
and international shipping terms and conditions. Provided, that there
is none interference from government, JONASA, and force majure clause
as per the JOINT VENTURE AGREEMENT signed and dated, June 29, 1984
(ARTICLE II).
6. JONASA to supply as per U.A.R. experts request, at reasonable time the
required personal (say 48 hours maximum), equipments (say 20 days
maximum), and other reasonable requests in order to meet all terms and
conditions contained in this contract. The said personal and equipment
to be always JONASA's responsibilities for payment, unless other
arrangements with U.A.R. have been agreed and signed previously.
7. U.A.R. will not request any payment from JONASA for the services and
expertise provided by this contract. However JONASA will provide
housing, transportation, communication equipments, and all necessary
documents required by Brazilian Government for alien experts to be
stationed in the facilities of each project. U.A.R. to train personal
to be provided by JONASA, for upgrading and management positions to be
assumed by them for each project that this contract is covering.
8. This contract to be valid for the period of each JOINT VENTURE
AGREEMENT, U.A.R. and JONASA will cause to sign or already sign and can
only be terminated as per ARTICLE 12 / (TERMINATION) of the JOINT
VENTURE AGREEMENT signed and dated, June 29, 1984.
9. U.A.R. to have first refusal form JONASA for any project to be caused
in the State of Para in the scope of projects covered by this contract
and JONASA to have first refusal from U.A.R. for any project stated
above, for the State of Para in the Federal Republic of Brazil.
It is therefore been accepted and agreed by both parties to sign this agreement
here below.
Belem, July 11, 1985
For JOAQUIM FONSECA, NAVEGACAO, INDUSTRIA E COMERCIO S/A.
/s/
FRANCISCO JOAQUIM FONSECA
PRESIDENT DIRECTOR
/s/
ROBERTO SEIXAS SIMOES
ADMINISTRATIVE DIRECTOR
<PAGE> 22
ADDENDUM THREE TO THE JOINT VENTURE
According to ARTICLE 13 of the JOINT VENTURE between U.A.R. - UNITED AMAZONIAN
RESOURCES LIMITED, dated, June 29, 1984, and ADDENDUM dated, July 10, 1985 it is
hereby mutually agreed that all terms and conditions and addendums of the said
JOINT VENTURE AGREEMENT transferred and assigned, to JONASA - JOAQUIM FONSECA,
NAVEGACAO, INDUSTRIA E COMERCIO S/A., with HEAD OFFICE at Rua Professor Nelson
Ribeiro, 161, Belem, State of Para, Brazil.
Belem, July 11, 1985.
FOR JOAQUIM FONSECA, NAVEGACAO, INDUSTRIA E COMERCIO S/A.
/s/
FRANCISCO JOAQUIM FONSECA
PRESIDENT DIRECTOR
/s/
ROBERTO SEIXAS SIMOES
ADMINISTRATIVE DIRECTOR
FOR UNITED AMAZONIAN RESOURCES LIMITED
/s/
IGNATIUS ZAPHEIRIUS THEODOROU
MANAGING DIRECTOR
/s/
CARLOS GOMES DA ROCHA
DIRECTOR
FOR COMPANHIA AGROPECUARIA DO RIO JABUTT
/s/
FRANCISCO JOAQUIM FONSECA
PRESIDENT DIRECTOR
/s/
ROBERTO SEIXAS SIMOES
ADMINISTRATIVE DIRECTOR
<PAGE> 23
AGREEMENT
It is hereby agreed between JONASA - JOAQUIM FONSECA, NAVEGACAO, INDUSTRIA E
COMERCIO S/A. with HEAD OFFICE at Rua Professor Nelson Ribeiro, 161, Belem,
State of Para, Brazil, from now on called JONASA, and UNITED AMAZONIAN RESOURCES
LIMITED with HEAD OFFICE at Guernsey, 7 New Street, Lyric House, St. Peter Port,
Chanel Island with OPERATION OFFICE at 101, Septemvriou St. Athens 10434,
Greece, from now on called U.A.R., that, the two parties will establish a JOINT
VENTURE AGREEMENT with the purpose of manufacturing and packaging facilities in
Belem, State of Para, Brazil.
The said facilities to engage in activities according to the MANAGEMENT
AGREEMENT, signed, July 11, 1985. Further terms and conditions will be added,
with this agreement both parties accept the three (3) below conditions to be the
foundations of this JOINT VENTURE. The company for the JOINT VENTURE to be named
UNITED AMAZONIAN RESOURCES DO BRASIL.
CONDITIONS:
1. JONASA and BRASAGUA - COMERCIO, EXPORTACAO E PARTICIPACOES LIMITADA,
will establish a company according to the Laws of Brazil, in Belem,
State of Para. This company will purchase the necessary land to built
the said facilities as needed.
2. The said company will produce and purchase all raw materials to be
manufactured as define in the MANAGEMENT AND MARKETING AGREEMENT
signed, July 11, 1985.
3. U.A.R. will undertake the management of the said company, marketing,
promotion, and sales world wide of all the products the said company
will produce on exclusive basis.
U.A.R. will provide all techno-economical studies for the feasibility
and purchase of the necessary machinery and equipment, for the
production of the said products as well as the purchase of the said
equipment.
With the agreement and understanding of both parties, it is hereby signed below.
FOR JOAQUIM FONSECA, NAVEGACAO, INDUSTRIA E COMERCIO S/A.
/s/
FRANCISCO JOAQUIM FONSECA
PRESIDENT DIRECTOR
/s/
ROBERTO SEIXAS SIMOES
ADMINISTRATIVE DIRECTOR
FOR UNITED AMAZONIAN RESOURCES LIMITED
/s/
IGNATIUS ZAPHEIRIUS THEODOROU WITNESSES:
MANAGING DIRECTOR 1. /s/
/s/ 2. /s/
CARLOS GOMES DA ROCHA
DIRECTOR
<PAGE> 24
AGREEMENT
This agreement is made on July 12, 1984, between the first party THYSSEN
SUDAMERICA N.V. (hereinafter called TSA), a company duly formed, legalized and
constituted in accordance with the laws of the Netherland Antilles, having its
registered Head Office at Scharlooweg, 100, Willemstad, Curacau, Netherlands
Antilles, and its operating Head Office at Av. Nilo Pecanha, 50 - Rio de
Janeiro, Brazil, duly represented by Mr. Friedrich Wilhelm Heimes, President,
and Mr. Wolf Peter Zeplin, Managing Director, and the second party, "MADEIRA
INTEX S.A. INTERNATIONAL EXPORTS", a company duly formed, legalized and
constituted under the laws of the Greek Democratic Republic, having its
registered Head Office in Athens, Greece, at 101, 3rd Septemvriou St., duly
represented by Mr. Ignatius Zapheirius Theodorou, Chairman of the Board, and Mr.
Carlos Gomes da Rocha, Director, hereinafter called "MADEIRA INTEX".
The parties jointly agree to the following:
CLAUSE I
"MADEIRA INTEX" has signed with Brazilian forest landowners exclusive forest
concession rights to extract, preserve, inspect, ship and market wood in logs,
sawn lumber and all byproducts derived from such wood, such as vegetal charcoal,
brickets, etc.
"MADEIRA INTEX" has been assured by the concessionaires of the existence of
valid export permits issued by the Brazilian government authorities for wood in
logs for all species within their concessions.
<PAGE> 25
CLAUSE II
TSA is interested to commercialize Brazilian wood in logs and all wood
byproducts mentioned in Clause I, produced by "MADEIRA INTEX", in the Far East
Region, especially in Japan, South Korean, Taiwan, Singapore, Philippines, etc.
TSA will commercialize the Brazilian wood logs and byproducts in this region
through offices belonging to the Thyssen Group of Companies.
CLAUSE III
"MADEIRA INTEX" agrees to sell exclusively through TSA all wood logs, sawn
lumber and byproducts into the markets mentioned in Clause II.
CLAUSE IV
TSA agrees to buy exclusively from "MADEIRA INTEX" all wood logs, sawn lumber
and byproducts for sale in the market areas mentioned in Clause II.
CLAUSE V
"MADEIRA INTEX" and TSA will market the wood in logs and the sawn lumber under
A.T.I.B.T. rules, which are internationally accepted.
CLAUSE VI
"MADEIRA INTEX" will sell the product to TSA under the following conditions:
<PAGE> 26
6.1. Price: To be expressed in US Dollars per CBM (m3) and to
be fixed on a quarterly basis. Prices to be
established on FOB or CIF, liner term basis by
common agreement.
6.2. Loading/Discharge Should TSA buy on FOB basis, loading rate in
Rates: port of Belem to be minimum 1.500 m3/ Discharge
rate at port of destination to be minimum 1.500
m3/day.
6.3. Quality: According to A.T.I.B.T. rules, min. diameter .50
m., max. length 5.
6.4. Type of Wood: As per Annex I.
6.5. Quantity: Minimum guaranteed yearly purchase quantity to be
established six months before the beginning of
each calendar year. First minimum yearly quantity
to be agreed upon after TSA's customers have
accepted sample shipments and all other conditions
of sale.
Minimum shipment per vessel approx. 15.000 m3, for
discharge in up to three ports of destination.
Time to count from arrival at first port and
completion of discharge at last port.
6.6. Measurements: In accordance with geometrical system approved by
I.B.D.F. (Instituto Brasileiro de
<PAGE> 27
Desenvolvimento Florestal).
<PAGE> 28
6.7. Inspection: Inspection and final acceptance of product to be
carried out at departing depot _____ to loading
into ocean vessel. Certificate of acceptance to be
signed by independent surveyors of both parties.
6.8. Payment: Payment by irrevocable L/C issued by First Class
bank, payable at sight upon presentation of
documents to be agreed in an _____ to this
Agreement, L/A to be established within 5 working
days after each order.
Long term contracts L/C to be established for the
minimum contracted quantity, at the beginning of
each year, on a revolving basis.
CLAUSE VII
TSA has the right to appoint their own experts or nominees to supervise
extraction, quality determination and preservation measure of logs according to
"MADEIRA INTEX" contractual obligations.
CLAUSE VIII
Protection and preservation:
"MADEIRA INTEX" to contract an internationally known company specialized in the
protection and preservation of tropical wood to supervise and certify that the
woo logs and/or the sawn lumbers have been protected and preserved in accordance
with internationally accepted practices and respective certificate will be
issued by this company to TSA, without any cost to TSA.
<PAGE> 29
CLAUSE IX
The period of this agreement is limited to the period of concessions that
"MADEIRA INTEX" has with several Brazilian forest land owners and will come into
force with the first shipment effected to TSA.
CLAUSE X
This agreement is subject to the approval of the Board of Directors of TSA. It
is further subject to the acceptance of TSA's customers in the Far Eastern
markets of the quality of samples shipped to them.
Rio de Janeiro, 12th July 1984
/s/ /s/
THYSSEN SUDAMERICA N.V. MADEIRA INTEX S.A.
<PAGE> 1
EXHIBIT 10(XXIII)
JOANAYE 0 JOAO SALIM NAVEGACAO LTD.
09 Carlos Ano Bom Street - Phone: +55 91 255-2636
CEP (zip code)67033-660 - Ananindcua - Para - Brazil
CGC 34.633.727/0001-28 State Inscrip. 15.148.522-4
PROPOSAL FOR SALE AND PURCHASE AND
AUTHORIZATION FOR EXPLORATION OF TIMBER
IN LOGS WITH FOREST MANAGEMENT
JOAO SALIM, PEDRO GALLETTI, JOSE CARLOS GALETTI and others, owners of a total of
46 parcels of lands in the municipalities of BREVES, PORTEL, and BAGRE, in which
various forest management projects are underway, with a total commercial
exploration of approximately 500 cm3 (FIVE HUNDRED CUBIC METERS).
The aforementioned parties offer to sell to the company EQUATORIAL RESOURCES
(BRAZIL) LTDA, according to the conditions set for hereinafter.
The owners of the aforementioned lands, having entered into complete agreement
with all the involved parties, have signed this present agreement, to sell the
timer withdrawn from the already liberated management projects upon receipt of
RS 7.50 (SEVEN REAL AND FIFTY REALS) per cubic meter of logs of any and all
species, with all extraction and transport expenses the responsibility of the
Buyer under the conditions and in compliance to specifications laid out by IBAMA
and upon payment by the buyer of RS 1,000,000.00 (ONE MILLION REALS), once
signed, the owners of the aforesaid lands commit themselves to place all the
properties with a total of approximately 300 thousand hectares at the disposal
of the company EQUATORIAL RESOURCES (BRAZIL) LTDA, by means of new contracts to
be drawn up in the future.
The sellers hereby commit themselves to comply with this present letter of
intentions of sale and purchase on or before March 30, 1997, in case this
proposal is accepted by the buyer in accordance to norms of IBAMA, the forest
management projects included in this contract shall enter into force upon the
signature of the definitive contract.
Belem, PA, February 28, 1997
----------------------------------
JOAO SALIM and OTHERS
----------------------------------
EQUATORIAL RESOURCES (BRAZIL) LTDA
<PAGE> 1
EXHIBIT 10(XXIV)
ECO-RATING INTERNATIONAL STANDARD AGREEMENT
This agreement is dated and executed on December 17, 1996 (the "Effective Date")
between Eco-Rating International, Incorporated, a corporation and Equatorial
Resources, Limited, a corporation. Equatorial Resources, Limited is a 70% owned
subsidiary of Nevada Manhattan Mining, Incorporated, a Nevada corporation.
RECITALS
I. Eco-Rating International, Inc. (hereinafter "ERI") is a California
corporation in good standing.
II. Equatorial Resources, Limited (hereinafter "client") is a British
Virgin Islands corporation in good standing.
III. The purpose and definition of an Eco-Efficiency Model is for the client
to receive a set of environmental management guidelines for their
project.
IV. ERI will gather the data necessary to derive this model with the full
cooperation of the client.
V. ERI engages and employs two methods of review. The methods are
sustainability and best available techonology.
<PAGE> 2
TERMS & CONDITIONS
1. ERI will provide the client with an Eco-Efficiency Model pertaining the
client's timber production concession in the area surrounding Belem,
Brazil.
2. COST AND METHOD OF PAYMENT: The cost of the study is set at $33,750.
The release of funds to ERI shall be in the following order:
A. Prior to arrival of the ERI inspection team at the client's
location in Belem, Brazil, a check to the order of $11,250
shall be made out and sent, via Federal Express, to ERI.
B. Upon presentation of the draft report by ERI to the client,
a check to the order of $11,250 shall be made out and sent,
via Federal Express, to ERI.
3. USE OF ERI'S SERVICE MARKS AND REPORT
A. ERI grants permission for the use of its service marks and
report in exchange for the valuable consideration received
from the client.
B. SCOPE: Any and all use of ERI's service marks and report is
however limited to the scope of the report provided for this
job. The client may not use the report for areas not covered
by ERI and not listed in paragraph 1 of the terms and
conditions herein. The client may not represent information to
third parties other than the information set out in the report
and the client may not represent the information outside the
<PAGE> 3
scope of which the report was intended and agreed upon
between the parties herein.
C. EXCLUSIONS AND LIMITATIONS OF THE REPORT: Field visits,
process analysis and other aspects of an environmental
assessment of suppliers to the client will NOT be carried out
(i.e. they will not be evaluated independently). Said
suppliers will only be included in the study where relevant to
the client's environmental performance.
D. MISUSE: In the even of the client's use of the report or any
representation made by the client regarding the content or
conclusion of the report are reasonably believed by ERI to be
outside the scope of the report as defined herein, the client
agrees to discontinue such use or representation forthwith.
Failure to immediately halt the use of the report shall
subject the client to liability for any damages to the ERI
name and/or reputation.
4. ADDITIONAL EXPENSES: The client is responsible for lodging, airfare and
transportation for the ERI team. The client is responsible for making
these arrangements and for the payment of these expenses in advance and
separate to this agreement. These expenses are additional and separate
to this agreement. These expenses are additional and are not included
int he project fees. They should be sent, via Federal Express, to the
ERI offices and the client should confirm the choice of airlines,
transportation and lodging with ERI. If the client does not wish to
make these arrangements for ERI's team, then ERI shall provide the
client with an expense list prior to travel and the client shall send,
via Federal Express, payment for these additional expenses.
5. CHOICE OF LAW: This contract shall be subject to and governed by the
Laws of the State of California.
<PAGE> 4
6. FORUM SELECTION CLAUSE: All parties to this agreement expressly consent
to the jurisdiction of the State of California. Any action over
$25,000.00 arising out of this agreement shall be maintained in the
Superior Court of the State of California in the West District located
at 1725 Main Street in the City of Santa Monica. Any action under
$25,000.00 shall be maintained in the Los Angeles Municipal Court, West
Los Angeles Branch, located at 1633 Purdue Avenue in the City of Los
Angeles.
7. SERVICE OF PROCESS: The client agrees to be served with any and all
process by certified mail at the offices of the client's California
agent, Christopher Michaels, at 5038 N. Parkway Calabasas, Suite 100,
Calabasas, California 91302.
8. ATTORNEY'S FEES: In any action arising out of this agreement, neither
side is entitled to recover its attorney's fees if they are the
prevailing party, with the exception of an indemnity action brought by
ERI.
9. FRUSTRATION OF PERFORMANCE BY THE CLIENT: At any time during the course
of the study, ERI may request the client to provide data necessary for
the completion of the report. The client agrees to furnish this
information in a timely manner. A timely manner is what is considered
reasonable in the industry relative to the data requested by ERI. If
the client fails to provide ERI with the data requested, then ERI is
under no obligation to finish the report and is relieved of their
duties under this agreement. The client shall supply any data requested
by ERI at their own expense.
A. INCOMPLETE REPORT DUE TO BREACH OF SECTION 9: In the event
that ERI cannot complete the report, the client shall pay
ERI a sum equivalent to the amount of hours ERI has spent
<PAGE> 5
working on this project multiplied by an hourly rate of
$100.00 per hour.
10. INDEMNITY AND HOLD HARMLESS: The client agrees to indemnify ERI and its
affiliates and agents and employees in the event an action arising out
of this agreement is brought against ERI as a result of this project.
The client also agrees to hold harmless ERI and its agents, affiliates
and employees for the data used or incorporated in the report. The
client also agrees to exculpate ERI for ordinary negligence. ERI shall
be entitled to recover attorney's fees if sued by a third party as a
result of this agreement and ERI prevails on their indemnity claim
against the client.
11. EXPERT WITNESS TESTIMONY: In the event ERI is required to, or the
client requests that ERI testify in an administrative or legal
proceeding for any activity under this agreement or regarding any
report prepared pursuant to this agreement or make an affidavit on the
client's behalf, the client shall bear all travel and lodging expenses
related with such aid and shall pay the ERI witness an hourly expert
witness rate in advance at the rate of $150.00 per hour.
12. CONFIDENTIALITY AND USE OF REPORT BY ERI: ERI shall not release the
contents from the Eco-Efficiency Model unless it is required to do so
by lawful process or it receives written permission from the client.
13. ORAL MODIFICATIONS: This agreement reflects the entire agreement
between the client and ERI and/or its agents. No waiver, modification,
amendment, addition or cancellation shall be effective unless in
writing and signed by corporate officers of both parties.
<PAGE> 6
Signed: Date:
/s/
Marc M. Baum, Ph.D. ________________
President
Eco-Rating International, Inc.
Signed: Date:
/s/ ________________
Jeffrey Kramer
Chief Operating Officer
Equatorial Resources Limited
<PAGE> 1
EXHIBIT 10.(XXV)
SALE AND PURCHASE AGREEMENT
THIS SALE AND PURCHASE AGREEMENT (this "Agreement") is effective as of
February 6, 1997. The parties to this Agreement who are collectively referred
to below as "Sellers" are Anthony C. Selig, an individual, and Dixie
Exploration Corporation, a Nevada corporation. The party to this Agreement who
is referred to below as "Nevada Manhattan" is Nevada Manhattan Mining, Inc., a
Nevada corporation. The address of Sellers for purposes of this Agreement is
c/o Anthony C. Selig at 3430 Westwind Road, Las Vegas, Nevada 89102. The
address of Nevada Manhattan for purposes of this Agreement is 5038 N. Parkway
Calabasas, Suite 100, Calabasas, California 91302.
1. Definitions. For all purposes of this Agreement, the terms
defined in this Section 1 shall have the following meanings:
(a) "21 Encumbered Argus Claims" means the fifteen patented
and six unpatented Argus Claims which are encumbered by the Deed of Trust and
are described in Exhibit A to the Deed of Trust;
(b) "Argus Claims" means all of the 57 (28 patented plus 29
unpatented) mining claims which are described in Schedule I to the Quitclaim
Deed and all land within the exterior boundaries thereof;
(c) "BLM" means the United States Bureau of Land Management;
(d) "Deed of Trust" means the Deed of Trust and Assignment
of Rents that was recorded in the official records of Nye County, Nevada as
Document No. 242237 at 1:30 p.m. on August 24, 1989;
(e) "Effective Date" means the effective date of this
Agreement;
(f) "Limited Consent" means the Owner's Limited Consent to
Assignment executed by Anthony C. Selig and Marlowe Harvey on or about August
5, 1993;
(g) "Maintenance Fee" means the $100 maintenance fee
payable to the BLM on or before August 31 of each calendar year with respect to
any unpatented mining claim;
(h) "Marlowe Harvey" means an individual citizen of Canada
whose last known address is Suite 101, 9482 William Street, Chilliwack, British
Columbia, Canada U2P 5G1;
<PAGE> 2
(i) "Promissory Note" means the Promissory Note which is
referred to in Paragraph A on page 2 of the Deed of Trust;
(j) "Quitclaim Deed" means the Quitclaim Deed attached to
and incorporated in this Agreement as Exhibit A;
(k) "Request for Reconveyance" means the Request for Full
Reconveyance attached to and incorporated in this Agreement as Exhibit B;
(l) "Selig/Harvey Purchase Agreement" means the Purchase
Agreement between Anthony C. Selig and Marlowe Harvey that was made and entered
into on March 22, 1993;
(m) "South Main Claims" means the 25 unpatented mining
claims which are described in Schedule II to the Quitclaim Deed and all land
within the exterior boundaries thereof;
(n) "Total Purchase Price" means $375,000 payable in
installments as explained in Section 7 ("Sale and Purchase") of this Agreement,
plus interest on the unpaid balance thereof; and
(o) "WC Claims" means the 130 unpatented mining claims
which are described in Schedule III to the Quitclaim Deed and all land within
the exterior boundaries thereof.
2. The Argus Claims. Nevada Manhattan owns or controls interests
in each of the 28 patented and 29 unpatented Argus Claims. Payment of the
Promissory Note to Anthony C. Selig by Nevada Manhattan is secured by the Deed
of Trust, and the Deed of Trust applies only to the 21 Encumbered Argus Claims.
Therefore, Anthony C. Selig has a security interest in the 21 Encumbered Argus
Claims. However, neither of the Sellers has any other interest of any kind in
the Argus Claims or the land which is included within the exterior boundaries
thereof and Sellers hereby disclaim and release to Nevada Manhattan any other
interest.
3. The South Main and WC Claims. Sellers or one of them originally
staked some of the South Main Claims and the WC Claims. After they were
originally staked, some of the South Main Claims and some of the WC Claims
were declared invalid by the BLM. Except for the interest which was acquired by
staking some of the South Main Claims and the WC Claims, neither of the Sellers
has any interest in the land which is included within the exterior boundaries
of any of the South Main Claims or the WC Claims and Sellers hereby disclaim
and release to Nevada Manhattan any other interest.
4. Intent of the Parties. Sellers desire to sell to Nevada
Manhattan and Nevada Manhattan desires to purchase from Sellers all of the
individual and collective
-2-
<PAGE> 3
interests which Sellers have or may acquire in or to the Promissory Note, the
Deed of Trust, and real property located within the exterior boundaries of the
Argus Claims, the South Main Claims, and the WC Claims. Therefore, for and in
consideration of the following mutual promises and conditions, Sellers and
Nevada Manhattan agree as set forth in Sections 1 through 25 of this Agreement.
5. Warranties by Sellers. Sellers jointly and severally represent
and warrant to Nevada Manhattan that:
(a) Except for the Selig/Harvey Purchase Agreement, prior
to the Effective Date, neither of the Sellers has encumbered, assigned,
conveyed or otherwise transferred all or any portion of his or its respective
interests in the Promissory Note, the Deed of Trust, the Argus Claims, the South
Main Claims, or the WC Claims;
(b) Except for the Selig/Harvey Purchase Agreement, the
Limited Consent and this Agreement, neither of the Sellers is a party to any
oral or written contract of any kind (recorded or unrecorded) which does or
could have any impact whatsoever with regard to the respective interests of
Sellers in the Promissory Note, the Deed of Trust, the Argus Claims, the South
Main Claims or the WC Claims;
(c) Except for the Selig/Harvey Purchase Agreement and the
Limited Consent, neither of the Sellers is a party to any oral or written
contract of any kind (recorded or unrecorded) with Marlowe Harvey or any
company or entity owned or controlled by Marlowe Harvey;
(d) Sellers have disclosed to Nevada Manhattan all
information concerning the Promissory Note, the Deed of Trust, the Selig/Harvey
Purchase Agreement and the Limited Consent which is within the knowledge,
possession or control of the Sellers;
(e) For purposes of the marital and/or community property
laws of the State of Nevada, the interests sold by Anthony C. Selig under this
Agreement are his sole and separate property; and
(f) The entity formerly known as Anthony C. Selig and
Associates was a limited partnership that no longer exists and no longer has or
asserts any interest whatsoever in the Promissory Note, the Deed of Trust, the
Argus Claims, the South Main Claims, or the WC Claims.
Each of the parties to this Agreement acknowledges that Anthony C.
Selig has terminated the Selig/Harvey Purchase Agreement, and that termination
thereof may result in litigation which could involve any or all of the parties
to this Agreement.
6. Capacity and Authority. Each of the parties to this Agreement
represents and warrants to each of the others that:
-3-
<PAGE> 4
(a) If it is a corporation, it is properly formed and in
good standing in its place of formation and fully qualified to do business and
in good standing in the State of Nevada;
(b) He or it has the capacity to enter into and perform
this Agreement and all transactions contemplated herein and that all corporate
and other actions required to authorize him or it to enter into and perform
this Agreement have been properly taken;
(c) This Agreement has been duly executed and delivered by
him or it and is valid and binding upon him or it in accordance with its terms;
(d) His or its contributions to this Agreement do not and
will not constitute all or substantially all of his or its corporate or other
assets; and
(e) Any person executing this Agreement on his or its
behalf is fully authorized to do so.
7. Sale and Purchase. In exchange for payment by Nevada Manhattan
of the Total Purchase Price, Sellers agree to sell to Nevada Manhattan all of
the individual and collective interests which Sellers have or may acquire in or
to the Promissory Note, the Deed of Trust, the Argus Claims, the South Main
Claims, the WC Claims and all of the land included within the exterior
boundaries of each of the Argus Claims, the South Main Claims, and the WC
Claims. Seller acknowledges receipt of $100,000 from Nevada Manhattan
simultaneously with execution of this Agreement as payment of the first
Installment of the Total Purchase Price. Beginning on the Effective Date, the
unpaid balance of the Total Purchase Price ($275,000) shall bear simple
interest at the annual rate of five and one-fourth percent (5.25%) and shall be
payable as follows:
(a) $100,000 on or before the first anniversary of the
Effective Date; and
(b) $175,000 plus all accrued interest on or before the
second anniversary of the Effective Date.
Nevada Manhattan shall have the right, at any time and without penalty,
to prepay all or any part of the unpaid balance of the Total Purchase Price.
8. Quitclaim Deed and Request for Reconveyance. Simultaneously
with full payment by Nevada Manhattan of the Total Purchase Price, Sellers
shall:
(a) Deliver the original executed copies of the Promissory
Note and Deed of Trust to Nevada Manhattan;
- 4 -
<PAGE> 5
(b) Date, execute and acknowledge the Quitclaim Deed and
deliver it to Nevada Manhattan; and
(c) Date, execute and acknowledge the Request for Reconveyance
and deliver it to Nevada Manhattan.
Immediately upon completion of the steps required by this Section 8,
except as expressly provided to the contrary in Section 24 ("Survival of
Warranties and Indemnifications") below, this Agreement shall terminate
automatically without the need for further act by the parties or any of them.
9. The Promissory Note. The amounts payable to Anthony C. Selig under
the Promissory Note (both principal and interest) are hereby replaced with the
amounts of principal and interest payable to Sellers under Section 7 ("Sale and
Purchase") of this Agreement. To the extent that the Promissory Note and/or the
Deed of Trust are inconsistent in any way with this Agreement, the Promissory
Note and the Deed of Trust are hereby modified by mutual consent of the parties
thereto and this Agreement shall control in all respects.
10. Manner of Payment. Each payment due to Sellers from Nevada
Manhattan under Section 7 ("Sale and Purchase") of this Agreement shall be made
by a single check made payable to a single individual or entity designated by
Sellers. At any time and from time to time, Sellers may change the individual
or entity so designated by giving notice of the change to Nevada Manhattan. The
individual so designated by Sellers on the Effective Date is Anthony C. Selig
and, until Nevada Manhattan receives notice from Sellers changing that
designation, all payments due to Sellers hereunder shall be made to Anthony C.
Selig. Regardless of the succession by others to all or any part of the
respective interests hereunder of Sellers or either of them, whether the same
is effected by sale, assignment, devise, will or other voluntary act or by
operation of law or otherwise, Nevada Manhattan shall not be required to divide
any individual payment due to Sellers under Section 7 of this Agreement or to
distribute portions thereof to multiple individuals or entities.
11. Exploration Operations. As between Sellers and Nevada Manhattan,
with respect to any of the South Main Claims or the WC Claims, Nevada Manhattan
shall have the sole and exclusive right to conduct mineral exploration
operations or activities of any sort thereon, and may remove such bulk samples
or other quantities of minerals therefrom as may be necessary or desirable for
exploration purposes without the payment to Sellers of any additional cash or
other consideration. Any such exploration operations or activities shall be
conducted at the sole option and discretion of Nevada Manhattan and at
Nevada Manhattan's sole cost and expense.
12. Liens and Indemnification. In the event that Nevada Manhattan
conducts any mineral exploration operations or activities on the South Main
Claims or the WC Claims, then Nevada Manhattan shall make prompt and timely
payment of all debts
-5-
<PAGE> 6
incurred by Nevada Manhattan in connection therewith including, without
limitation, debts for work, services, labor, materials, supplies, and
equipment. Nevada Manhattan will not allow any third party to perfect any lien
arising from or in connection with such a debt incurred by Nevada Manhattan
against either the South Main Claims or the WC Claims. Nevada Manhattan hereby
assumes all liability for and indemnifies Sellers from and against all such
liens. It is expressly understood and agreed by Sellers and Nevada Manhattan
that the foregoing indemnification has no application whatsoever to operations
or activities within the South Main Claims or the WC Claims which are conducted
by any individual or entity other than Nevada Manhattan without Nevada
Manhattan's express prior written consent.
13. Insurance. Before commencing any mineral exploration operation or
activity within the South Main Claims or the WC Claims, Nevada Manhattan shall
(at its sole expense) provide Sellers with copies of insurance and/or
insurance policies, certificates or riders with terms, coverage and minimum
amounts sufficient to fully insure Nevada Manhattan consistent with good
business practices against all risks related to the mineral exploration
operations or activities to be undertaken by Nevada Manhattan. All liability
insurance policies, certificates or riders shall name Sellers as additional
insured parties and shall be maintained in force and effect by Nevada Manhattan
for so long as the insured activities or operations continue.
14. Claim Maintenance. Subject to the provisions of Section 15
("Partial Surrender") of this Agreement, on or before July 1 of every calendar
year, Nevada Manhattan shall pay the Maintenance Fee for:
(a) Each of the 6 unpatented Argue Claims which is subject to
the Deed of Trust; and
(b) Each of the South Main Claims and each of the WC Claims
which was not declared invalid by the BLM before the Effective Date.
For each calendar year during which Nevada Manhattan is obligated
hereunder to pay the Maintenance Fee for a particular unpatented mining claim,
Nevada Manhattan shall record in timely fashion any proof of payment that is
required by applicable law in order to maintain the respective interests of the
parties in and to the mining claim in question and shall furnish Sellers with a
photocopy of each document so recorded within thirty (30) days after its
recordation.
15. Partial Surrender. Subject only to the provisions of Section 14
("Claim Maintenance") of this Agreement, at any time and from time to time
Nevada Manhattan may surrender to Sellers all or any portion of the South Main
Claims or the WC Claims by giving Sellers notice of Nevada Manhattan's decision
to do so. From and after the date of receipt by Sellers of such a notice from
Nevada Manhattan, the mining claim or claims described therein shall no longer
be subject to this Agreement in any way except that Nevada Manhattan shall pay
the Maintenance Fee or Fees for
-6-
<PAGE> 7
the mining claims or claims in question if it is required to do so under
Subsection 14(b) hereof and the notice of surrender is received by Sellers
after July 1 during the year of surrender. Subject only to the next sentence of
this Section 15, within thirty days after surrendering a particular mining
claim, Nevada Manhattan shall deliver to Sellers a quitclaim deed which
transfers to Sellers all of Nevada Manhattan's right, title and interest
therein without warranties of any sort. In its discretion, Nevada Manhattan may
reserve an easement over and across the mining claim or claims so surrendered to
be used by Nevada Manhattan for the purpose of its operations in the vicinity
thereof. No partial surrender by Nevada Manhattan shall reduce the Total
Purchase Price.
16. Amendment and Relocation. Nevada Manhattan shall have the
right, but shall not be required, to amend or relocate all or any of the six
unpatented Argus Claims which are subject to the Deed of Trust, the South Main
Claims and the WC Claims if such amendment or relocation is necessary in order
to confirm, protect or preserve the rights therein of any of the parties to this
Agreement. All actions taken by Nevada Manhattan under this Section 16 shall be
taken at the sole expense of Nevada Manhattan, and no such action shall
constitute a breach of any of Nevada Manhattan's obligations to Sellers
hereunder if the same is taken by Nevada Manhattan in the good faith belief that
it is necessary in order to confirm, protect or preserve the rights of either
Sellers or Nevada Manhattan in or to the Argus Claims, the South Main Claims or
the WC Claims.
17. Termination by Sellers. Sellers shall give Nevada Manhattan
notice specifying any alleged default by Nevada Manhattan in the terms and
provisions of this Agreement. If the alleged default is the failure by Nevada
Manhattan to timely make any payment required by Section 7 ("Sale and
Purchase") of this Agreement, then Sellers may terminate this Agreement if
Nevada Manhattan fails to make the past due payment within fifteen (15) days
after Nevada Manhattan's receipt of the default notice from Sellers. If the
alleged default is anything else, then Sellers may terminate this Agreement if
Nevada Manhattan fails to initiate (and thereafter diligently prosecute)
measures to cure the alleged default within sixty (60) days after Nevada
Manhattan's receipt of the required notice thereof. This Agreement and the
rights granted to Nevada Manhattan hereunder may not be terminated by Sellers,
in whole or in part, unless Nevada Manhattan fails to cure any alleged default
within sixty (60) days after such default has been confirmed by a final and
unappealable decision of a court of competent jurisdiction in the event that
Nevada Manhattan elects to contest the same.
18. Assignment/Binding Effect. No party to this Agreement shall
assign all or any part of his or its respective rights or duties hereunder
without the prior consent of each of the other parties to this Agreement, which
consent shall not be unreasonably withheld. Any assignment made without such
prior consent shall be void. The terms and provisions of this Agreement shall
inure to the benefit of, be binding upon, and enforceable by Sellers and Nevada
Manhattan and their respective
-7-
<PAGE> 8
successors, assigns, estates, heirs, legatees, devisees, personal
representatives and executors.
19. Notice. All notices, consents, payments, or other
communications required or permitted by the terms of this Agreement shall be in
writing, and each such communication shall be either personally delivered or
placed in the United States Certified Mail, postage prepaid, return receipt
requested. Each such communication shall be either delivered or mailed to
Sellers or Nevada Manhattan (as appropriate) at their respective addresses set
forth in the initial paragraph of this Agreement. Communications so mailed
shall be deemed to have been made, given and received on the date of receipt
indicated on the return receipt therefor. Sellers or Nevada Manhattan may
change their respective addresses for notice by giving notice of the change in
the fashion required by this Section 19.
20. Modification. Subject only to the provisions of Sections 15
("Partial Surrender") and 21 ("Choice of Law and Severability") hereof, this
Agreement may not be modified, amended, extended, supplemented or otherwise
altered in any fashion except by written instrument executed by each of the
Sellers and Nevada Manhattan.
21. Choice of Law and Severability. The parties shall be subject
to and the terms and provisions of this Agreement shall be construed under the
laws of the State of Nevada. The individual provisions of this Agreement are
severable. If any such individual provision is contrary to or in conflict with
any requirement or principle of applicable statutory or common law, then that
provision shall be severed herefrom but the remainder of this Agreement shall
remain in force and be construed so as to give effect to the intent of the
parties.
22. Interpretation. If necessary to give effect to the terms and
provisions hereof, references to the neuter gender shall include the masculine
and/or the feminine genders, references to the plural shall include the
singular and vice-versa.
23. Further Assurances. The parties agree to execute and deliver
such additional or further formal assurances or other written documents, in
proper and recordable form, as may be reasonably necessary to carry out the
intent, purposes and terms of this Agreement.
24. Survival of Warranties and Indemnifications. All warranties
and all indemnifications contained in this Agreement shall survive any
termination or expiration hereof to the extent required to give full effect
thereto, and no such warranty or indemnification shall merge to or with the
terms or provisions of any document delivered by one party to this Agreement to
another after the Effective Date including, without limitation, the Quitclaim
Deed and the Request for Reconveyance.
25. Sole Agreement. As of the Effective Date, the Promissory Note,
the Deed of Trust and this Agreement shall constitute the sole and exclusive
understanding between
- 8 -
<PAGE> 9
Sellers of either of them and Nevada Manhattan with respect to the subject
matter hereof, all other agreements between them with respect to the subject
matter hereof (if any) being expressly terminated, rescinded and replaced
hereby. The respective rights and duties of the parties with regard to the
subject matter hereof are strictly limited to the rights and duties expressly
set forth in the Promissory Note, the Deed of Trust, and this Agreement. No
implied covenants of any sort are either contained herein or intended by the
parties except for the implied covenant of good faith and fair dealing.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
Effective Date.
ANTHONY C. SELIG
/s/ Anthony C. Selig
----------------------------------
DIXIE EXPLORATION CORPORATION
By /s/ Anthony C. Selig
--------------------------------
Typed Name: Anthony C. Selig
------------------------
Title: President
----------------------------
NEVADA MANHATTAN MINING, INC.
By /s/ Christopher D. Michaels
---------------------------------
Typed Name: Christopher D. Michaels
------------------------
Title: CEO
-----------------------------
-9-
<PAGE> 10
STATE OF NEVADA )
) ss.
COUNTY OF CLARK )
On this 21st day of March, 1997, Anthony C. Selig personally appeared
before me, a notary public, who acknowledged that he executed the above
instrument for the purposes therein contained.
/s/ Carole Schindler
-----------------------------------
Notary Public
[CAROLE SCHINDLER NOTARY SEAL]
My commission expires: 1-17-99
-------
STATE OF NEVADA )
) ss.
COUNTY OF CLARK )
On March 21st, 1997, Anthony C. Selig personally appeared
before me, a notary public, who acknowledged that he executed the above
instrument as President of Dixie Exploration Corporation, a Nevada corporation.
/s/ Carole Schindler
-----------------------------------
Notary Public
[CAROLE SCHINDLER NOTARY SEAL]
My commission expires: 1-17-99
-------
-10-
<PAGE> 11
STATE OF CALIFORNIA )
) SS.
COUNTY OF LOS ANGELES )
On March 26, 1997, Christopher D. Michaels personally appeared before
me, a notary public, who acknowledged that he executed the above instrument as
CEO of Nevada Manhattan Mining, Inc., a Nevada corporation.
/s/ R.M. Knippenberg
-----------------------------
Notary Public
[SEAL]
My commission expires May 25, 1999
[R.M. Knippenberg Notary Seal]
-11-
<PAGE> 12
EXHIBIT A TO SALE AND PURCHASE AGREEMENT: THE QUITCLAIM DEED
THIS QUITCLAIM DEED is executed on and effective as of_________________,
19__. It is from Anthony C. Selig, an individual ("Selig"), and Dixie
Exploration Corporation, a Nevada corporation ("Dixie"), to Nevada Manhattan
Mining, Inc. ("Nevada Manhattan"), a Nevada corporation. For good and valuable
consideration, Selig and Dixie hereby quitclaim to Nevada Manhattan all of the
right, title and interest of Selig and Dixie in and to the patented and
unpatented mining claims described in Schedules I, II and III attached hereto
and incorporated herein and in and to all real property within the exterior
boundaries thereof. To have and to hold the same forever, in witness whereof,
Selig and Dixie have executed this Quitclaim Deed effective as of the day and
year indicated above.
ANTHONY C. SELIG
________________________________________
DIXIE EXPLORATION CORPORATION
By______________________________________
Typed Name:_____________________________
Title:__________________________________
EXHIBIT A TO SALE AND PURCHASE AGREEMENT: THE QUITCLAIM DEED
Page 1
<PAGE> 13
STATE OF__________________ )
)ss.
COUNTY OF_________________ )
On this __ day of ___________, 19__, Anthony C. Selig personally
appeared before me, a notary public, who acknowledged that he executed the
above instrument for the purposes therein contained.
_________________________________
Notary Public
[SEAL]
My commission expires:_________________
STATE OF_________________ )
)ss.
COUNTY OF________________ )
On _______________, 19__, ________________________________ personally appeared
before me, a notary public, who acknowledged that he executed the above
instrument as ______________________ of Dixie Exploration Corporation, a Nevada
corporation.
______________________________________
Notary Public
[SEAL]
My commission expires: ________________
EXHIBIT A TO SALE AND PURCHASE AGREEMENT: THE QUITCLAIM DEED
Page 2
<PAGE> 14
SCHEDULE I: THE ARGUS CLAIMS(1)
<TABLE>
<CAPTION>
Patented Claim Name Mineral Survey Patent Number
- - ------------------- -------------- -------------
Number
------
<S> <C> <C>
Annie Laurie 2874 441202
Dexter #7 2602 46212
Earl 2544 375993
Eva 3667 537035
Flying Cloud 3667 537035
Ivanhoe 2773 46617
Katie #1 2651 46321
Keystone 2692 555879
Morning Glory 4073 552989
Muleskinner 2882 123980
Pine Nut #2 4073 552989
Red Boy or Red Roy 2693 676958
Silver Pick #1 2528 Am. 674983
Snow Drift 2764 459615
Snowman 3667 537035
Union 2625 46616
Union #1 2625 46616
Union #2 2552 114749
Union #3 2553 32959
Union #4 2554 46332
Union #5 2555 94281
Uno 2695 98424
White Cap 2579 46176
White Cap No. 1 2579 46176
White Cap Extension or Extension No. 1 4335 734331
White Cap Extension No. 1 or No. 2 4335 734331
Whoopee Fraction 2694 46320
Dexter #8 2602 46212
SUBTOTAL: 28 PATENTED ARGUS CLAIMS
</TABLE>
- - --------------------
(1) The "Argus" patented and unpatented claims are in the Manhattan Mining
District, Sections 20, 21, 22, 27, 28 and 29, Township 8 North, Range 44 East,
Mt. Diablo Meridian, Nye County, Nevada.
SCHEDULE I: THE ARGUS CLAIMS
Page 1
<PAGE> 15
Unpatented Claim Name NMC No.
- - --------------------- -------
Combination 93112
Lillie Fraction 93108
Little Joe #1 93115
Little Joe #2 93116
Little Joe #3 93117
Little Joe #4 93118
Little Joe #5 93119
Little Joe #6 93120
Little Joe #7 93121
Little Joe #8 93122
Little Joe #9 93123
Little Joe #10 93124
Little Joe #11 93125
Little Joe #12 93126
Little Joe #13 93127
Little Joe #14 93128
Little Joe #15 93129
Little Joe #16 93130
Little Joe #17 93131
Little Joe #18 93132
Little Joe Fraction #19 93133
Little Joe Fraction #20 93134
Little Joe Fraction #21 93135
Little Johnnie Fraction 93109
Mable A 93107
Pandora Fraction 93110
Turtle Dove Fraction 93111
Granny Fraction 93113
Yellow Horse Fraction 93114
SUBTOTAL: 29 UNPATENTED ARGUS CLAIMS
TOTAL: 58 ARGUS CLAIMS
SCHEDULE I: THE ARGUS CLAIMS
Page 2
<PAGE> 16
SCHEDULE II: THE SOUTH MAIN CLAIMS(1)
Unpatented Claim Name Year Located/NMC Year Relocated/NMC
South Main 1982/241433
1 1982/241434
2 1982/241435
3 1982/241436
4 1982/241437
5 1982/241438
6 1982/241439
7 1982/241440
8 1982/241441
9 1982/241442
10 1996/735896
12 1982/241445
14 1982/241447
15 1982/241448
16 1982/241449
17 1982/241450
18 1996/735897
19 1996/735898
20 1996/735899
21 1982/241454
22 1982/241455
23 1982/241456
24 1982/241457
25 1982/241458
26 1982/241459 1987/443759
TOTAL: 25 UNPATENTED SOUTH MAIN CLAIMS
____________________
(1) The "South Main" unpatented claims are in the Manhattan Mining District,
Sections 20-21 and 28-29, Township 8 North, Range 44 East, Mt. Diablo Meridian,
Nye County, Nevada.
SCHEDULE II: THE SOUTH MAIN CLAIMS
Page 1
<PAGE> 17
SCHEDULE III; THE WC CLAIMS(1)
UNPATENTED CLAIM NAME NMC NO.
#2 260866
#4 260868
#6 735900
#8 735901
#10 443686
#12 443688
#13 443689
#14 443690
#15 260879
#16 443691
#17 260881
#18 443692
#19 260883
#20 443693
#21 735902
#22 443694
#23 735903
#24 443695
#25 735904
#26 735905
#27 443696
#28 443697
#29 443698
#30 443699
#31 443700
#32 443701
#33 443702
#34 443703
#35 735906
#36 260900
#37 260901
#38 260902
#39 260903
#40 260904
#41 260905
#42 260906
#43 260907
#44 260908
#46 260910
#48 735907
____________________
(1) The "WC" unpatented claims are in the Manhattan Mining District, Sections
20-22 and 27-34 in Township B North and Sections 4-6 in Township 7 North, Range
44 East, Mt. Diablo Meridian, Nye County, Nevada.
SCHEDULE III: THE WC CLAIMS
Page 1
<PAGE> 18
Unpatented Claim Name NMC No.
- - --------------------- -------
#50 735908
#52 735909
#54 735910
#56 735911
#57 443708
#58 735912
#59 443709
#60 735913
#61 443710
#62 443711
#69 443718
#70 443719
#71 443720
#72 443721
#73 443722
#74 443723
#75 443724
#76 443725
#77 443726
#78 443727
#79 443728
#80 443729
#81 443730
#82 443731
#83 443732
#84 443733
#85 443734
#86 443735
#87 443736
#88 443737
#89 443738
#90 443739
#91 443740
#92 443741
#93 443742
#94 443743
#95 443744
#96 443745
#97 260961
#98 735914
#99 735915
#100 443747
#101 260965
#102 735916
#103 260967
#104 443749
SCHEDULE III: THE WC CLAIMS
Page 2
<PAGE> 19
Unpatented Claim Name NMC No.
- - --------------------- -------
#105 260969
#106 443750
#107 260971
#108 443751
#109 260973
#110 443752
#111 260975
#112 443763
#113 260977
#114 260978
#115 260979
#116 260980
#117 260981
#118 260982
#119 260983
#120 260984
#121 260985
#122 260986
#123 260987
#124 260988
#125 735884
#126 260990
#127 735885
#128 260992
#129 735886
#130 260994
#131 735887
#132 260996
#133 735888
#134 260998
#135 735889
#136 261000
#137 735890
#138 735891
#139 735892
#140 261004
#141 261005
#142 261006
#143 261007
#144 735893
#146 735894
#147 735895
Grannie Lode 594683
Boogie Lode 569966
TOTAL: 130 UNPATENTED WC CLAIMS
SCHEDULE III: THE WC CLAIMS
PAGE 3
<PAGE> 20
EXHIBIT B TO SALE AND PURCHASE AGREEMENT:
THE REQUEST FOR RECONVEYANCE
Request for Full Reconveyance
Anthony C. Selig, an individual ("Selig"), is the Beneficiary of the
Deed of Trust and Assignment of Rents dated as of August 22, 1989, and executed
by Argus Resources, Inc., Argus Mines, Inc., and Nevada Manhattan Mining, Inc.,
three Nevada corporations, as Trustors, to First American Title Insurance
Company of Nevada, as Trustee (the "Deed of Trust"). In a Substitution of
Trustee dated August 8, 1991, Cow County Title Company was substituted as
Trustee. Selig hereby acknowledges that the indebtedness secured by the Deed of
Trust has been discharged and released; and requests that the Trustee release
and reconvey to Trustors, as their respective interests appear of record, the
property subject to the Deed of Trust. The Deed of Trust was recorded on August
24, 1989, as Document No. 242237, in the real estate records of Nye County,
Nevada. The Substitution of Trustee was recorded therein on September 3, 1991,
as Document No. 291186.
Dated , 19 .
----------------- ---
ANTHONY C. SELIG
------------------------------------
STATE OF )
------------- ) ss.
COUNTY OF )
-------------
On this day of , 19 , Anthony C. Selig personally
----- --------------- ---
appeared before me, a notary public, who acknowledged that he executed the above
instrument for the purposes therein contained.
--------------------------------------
Notary Public
[SEAL]
My commission expires:
-----------------
EXHIBIT B TO SALE AND PURCHASE AGREEMENT: THE REQUEST FOR RECONVEYANCE
Page 1
<PAGE> 21
Official Records Nye County Nevada
Requested By: Nevada Manhattan Mining
03/27/97 3:06 PM
Naoma Lydon Recorder
Fee: $27.00 State: $ Dep: tp
I HEREBY CERTIFY THAT IF WITNESSED WITH THE
RAISED SEAL OF THE NYE COUNTY RECORDS
THIS IS A TRUE AND CORRECT COPY OF THE
ORIGINAL RECORD ON FILE IN THIS OFFICE.
MAR 27 1997
/S/ Naoma Lydon
NAOMA LYDON COUNTY RECORDER
NYE COUNTY, NEVADA
<PAGE> 1
EXHIBIT 21
SUBSIDIARIES OF THE COMPANY
The Company has recently formed two subsidiaries, Kalimantan Resources, Ltd.,
and Equatorial Resources, Ltd. Both companies were organized under the laws of
the British Virgin Islands. Kalimantan Resources, Ltd., is wholly owned by the
Company while Equatorial Resources, Ltd., is 80% owned by the Company.
<PAGE> 1
EXHIBIT 99(ii)
Executive Report
Nevada Manhattan Mining Inc. (NVMH)
5038 N. Parkway Calabasas, Suite 100
Calabasas, California 91302
1-818-591-4400
January 1997
<PAGE> 2
EXECUTIVE REPORT
NEVADA MANHATTAN MINING, INC. (NVMH)
5038 N. PARKWAY CALABASAS, SUITE 100
CALABASAS, CALIFORNIA 91302
(818) 591-4400
January 1997
PREPARED BY WILLIAM R. WILSON 1
REVIEWED BY TA M. LI 2
This Executive Report is the proprietary property of Nevada Manhattan Mining,
Inc.. No reproduction of this document is permissible without prior written
consent of Nevada Manhattan Mining, Inc..
1 Wilson has a professional degree in metallurgical engineering from
the Colorado School of Mines and an MBA from the University of Southern
California. His more than thirty years of experience includes ten years in
senior positions with engineering, construction, consulting and equipment
companies and ten years as president of several mining companies operating in
the United States and internationally. He is a past chairman of the Colorado
Mining Association, is currently Vice President - Operations of Nevada Manhattan
Mining, Inc. and serves on the boards of two publicly traded international
resource companies.
2 Li has a B.S. degree in Mining Engineering from the Columbia
University Henry Krumb School of Mines. His thirty years of experience include
senior positions with mining consulting firms and construction companies, and he
also was president of a mine development company with properties in Latin
America. He is a past president of the Northwest Mining Association, a past
chairman of the Colorado Mining Association and a director of the Society of
Mining, Metallurgy and Exploration. Mr. Li is currently Vice President,
Corporate Development, Behre Dolbear & Company, Inc., an internationally
recognized mining consulting firm.
<PAGE> 3
TABLE OF CONTENTS
Description Page
Chart of Company Activities .......................................... i
I. Executive Summary ............................................. 1
Overview .................................................... 1
Global Developments & Activities ............................ 1
United States ...................................... 1
Indonesia .......................................... 2
Brazil ............................................. 2
Public Markets .............................................. 3
Management Expertise ........................................ 3
Technical Expertise ......................................... 3
II. Objectives .................................................... 4
Gold ........................................................ 4
Coal ........................................................ 4
Forestry & Timber ........................................... 4
Corporate Staffing & Other Expertise ........................ 4
Financing ................................................... 5
III. Resource Development and Operations Strategy .................. 5
Indonesia: Western Kalimantan Gold Project ........... 6
Sopang Gold Project ....................... 7
Cepa Coal Projects ........................ 8
Brazil: Timber Operations ......................... 8
USA: Nevada Gold Mines ......................... 11
IV. Organization and Management .................................... 11
Management .................................................. 12
Technical Team in Indonesia ................................. 13
Technical Advisors .......................................... 13
Accountants ................................................. 14
Additional Services ......................................... 14
<PAGE> 4
Description Page
V. Financial Statements & Financial Risk Protection .............. 14
VI. Attachments
A. NEVADA MANHATTAN MINING, INC. - AUDITED FINANCIAL
STATEMENTS FOR THE PERIOD ENDING MAY 31, 1996,
& NOVEMBER 30, 1996 (Unaudited)
B. SECURITIES DESIGNATION LETTER
C. MANHATTAN LOCATION MAP
D. INDONESIA LOCATION MAP - WESTERN KALIMANTAN
GOLD PROJECT
E. INDONESIA LOCATION MAP - SOPANG PROJECT
F. INDONESIA LOCATION MAP - CEPA COAL PROJECT
G. BRAZIL LOCATION MAP
---------------------------------------------------------------------------
CONVERSION TABLE
1 HECTARE = 2.471 ACRES
1 METER = 3.281 FEET
1 KILOMETER = 0.6214 MILES
1 CUBIC METER = 1.308 CUBIC YARDS
1 GRAM = 0.03527 OUNCES
1 KILOGRAM = 2.2 POUNDS
1 KILOGRAM-CALORIE = 3.968 BTU
2,000 POUNDS = 1 ton
2,240 POUNDS = 1 metric ton
<PAGE> 5
[CHART OF COMPANY ACTIVITIES]
<PAGE> 6
I. EXECUTIVE SUMMARY
- - - OVERVIEW
Nevada Manhattan Mining, Inc.'s (NVMH) corporate mission is to build a
world-class, global natural resource company by acquiring, building, and
operating rich resource assets, which include precious metals and minerals as
well as forestry and timber, and to develop these assets on its own or in
conjunction with selected strategic partners. Not only is this strategy designed
to propel the Company to a level of significant cash flow, but it is also
intended provide an excellent return on investment and appreciation for the
Company's shareholders. NVMH has positioned itself as a broad-based natural
resource company which will aggressively compete in international markets and
will gain international investment recognition.
Until recently, NVMH's sole operation was the Manhattan Consolidated and White
Caps gold mines in the state of Nevada. Through a series of strategic
acquisitions, NVMH has vastly expanded its base of natural resources to include
forestry, timber, and coal to complement its rapidly growing portfolio of gold
mining properties. NVMH has already launched the development and production of
its forestry and timber concession in Brazil, and will be shipping the first
major production of semi-finished cut timber to North American, Asian, and
European markets in the first quarter of 1997. Through aggressive exploration
programs, NVMH will expand the development of its newly acquired gold and coal
concessions in Indonesia and, simultaneously, will seek new opportunities
primarily in East Asia. In the United States, NVMH will continue its development
of its gold mining properties in Nevada and bring them to full production in
1997. The Company intends to attain NASDAQ "Small Cap" or NMS status during 1997
pending an SB-2 registration with the United States Securities and Exchange
Commission.
- - - GLOBAL DEVELOPMENTS & ACTIVITIES
United States
During 1996, NVMH initiated mining activities at its Manhattan Mine Project in
Nevada. By year end, underground and surface ore was stockpiled and ready to be
milled in early 1997. Through negotiations and legal actions, the Company now is
the operator and controls 100% of the project. Work continues on extending the
decline to the high grade White Caps Mine which is expected to be in production
in 1997. NVMH expects to be producing 1,000 ounces of gold per month by the end
of 1997 at the Nevada property.
1
<PAGE> 7
Indonesia
As part of NVMH's strategic effort to expand its interests in gold mining
properties and other natural resources, the Company acquired two (2) gold mining
concessions as well as three (3) coal concessions on the island of Kalimantan in
Indonesia. As advised by Behre Dolbear & Company, the Company's internationally
renowned geological and mining consultants, each of the concessions are of
potential world-class stature. Much of the mining industry and international
investment community are beginning to learn that Indonesia and, especially, the
island of Kalimantan are becoming widely regarded as one of the world's richest
areas for metals and minerals, such as gold, copper, and coal. Major
international companies, including RTZ, Barrick Gold, and CRA, are already
acquiring and developing gold projects in Kalimantan. Indonesia is well regarded
for its giant gold deposits, most notably the Grasberg Mine operated by Freeport
McMoran in Irian Jaya and, more recently, the Busang Mine discovered by BRE-X.
The two (2) gold concessions acquired by NVMH are delineated as follows:
1. Western Kalimantan: a 62-hectare property (with the intent to expand
to at least 2000 additional hectares and beyond) located on the
Northwest coast of Kalimantan; and
2. Sopang: a 16,400-hectare property located in East Kalimantan.
The acquisition of these initial properties is most strategic, because it
provides NVMH with the opportunity to participate in one of the world's greatest
and richest areas for gold exploration. More importantly, these concessions are
NVMH's platform for acquiring additional mining projects in Indonesia and the
Asian region. These first two gold concessions exhibit large amounts of visible
alluvial gold, and early reconnaissance indicates the possibility of proximity
to major lode deposits. Preliminary exploration work, including surface sampling
and shallow trenching/bore holes, was initiated on the Western Kalimantan gold
project in the fourth quarter of 1996. For Sopang, on-site reconnaissance has
been initiated in early 1997.
Most recently, the Company completed its acquisition of three coal mining
concessions in East Kalimantan. These properties reportedly contain potential
large tonnage of high calorific, low sulfur, low ash coal which is suitable for
domestic and international markets. Preliminary government data indicates that
the region in East Kalimantan where NVMH has obtained its concessions contains
substantial deposits of coal. Plans for early stage exploration and development
of the concessions are underway.
Brazil
As part of its goal to achieve significant cash flow, NVMH acquired a large
timber operation near Belem, Brazil through its 80% owned subsidiary Equatorial
Resources ("Equatorial"). During the first quarter of 1997, Equatorial will be
cutting and milling
2
<PAGE> 8
select wood products for shipment to world markets. NVMH expects to generate in
1997 a positive cash flow in excess of US$6 million from its timber operations.
Production is expected to at least double by the end of 1997.
- - - PUBLIC MARKETS
In 1996, NVMH's Common Stock experienced a substantial price appreciation
ranging from US$1.25 per share to US$10.375 per share. This represents a
positive reflection on the Company's earnings potential. The Company's market
capitalization is currently in excess of US$90 million, which is undervalued
when compared to the Company's inventory of assets and reserves as well as
earnings growth.
During early 1997, the Company intends to attain NASDAQ "Small Cap" or NMS
status when its SB-2 Registration Statement ("Registration") becomes effective
with the United States Securities and Exchange Commission. This Registration
will facilitate additional financing and increase the shareholder base. Through
private and public financing as well as from internal cash flow, funds will be
allocated to fully explore and exploit the Company's investments into strategic
concessions. Furthermore, the Company will continue to aggressively seek and
acquire new assets to fulfill its mission to become a world-class, global
natural resource company.
- - - MANAGEMENT EXPERTISE
The Company has added two experienced engineering and technical persons to its
staff in order to enhance its expertise for managing its recent acquisitions.
William R. Wilson, a longtime consultant to the Company with thirty years of
mining experience, was appointed Vice President of Operations. He will be
responsible for all technical and engineering activities, including the
Manhattan Mine Project which has been under his supervision. Mr. Wilson will
assist with the Company's new developments in Indonesia and Brazil. Arthur
Mendenhall was appointed Manager for the Company's North American exploration
activities and will continue in his exploration efforts at the Manhattan Mine
Project as well as provide expertise for the Company's other mining projects.
- - - TECHNICAL EXPERTISE
In addition the Company engaged the services of Behre Dolbear and Company, Inc.
(Behre Dolbear) an internationally recognized geological and mining consulting
firm. Behre Dolbear will function as the Company's independent, third-party
technical advisor for the developments in Indonesia. Behre Dolbear represents
both international banking firms and mining companies in due diligence and
valuation of properties and related assets.
3
<PAGE> 9
II. OBJECTIVES
- - - GOLD
NVMH will initiate major exploration programs for its Indonesian gold projects
in Kalimantan in 1997. This will include continued surface exploration for
highly mineralized areas and core drilling of prospect areas to establish ore
reserves and subsequent feasibility studies. Drilling on at least one property
is expected to begin by the second quarter of 1997. Depending on overall company
financing and logistics, drilling on a second property would be initiated and
possibly completed in 1997.
The Company will also continue to its development of the Manhattan Consolidated
and White Caps Mines in Nevada. The initial ore stockpiled from underground and
surface operations is scheduled to be milled in the nearby New Concepts Mill in
early 1997. The new decline connecting the Manhattan Consolidated Mine and the
White Caps Mine will be completed in the first quarter of 1997, and ore
production in the White Caps Mine will proceed at that time. The Company expects
to produce in excess of 5,000 ounces of gold from the Manhattan Mine Project in
1997 and be at a break-even or better production level by the end of the year.
- - - COAL
NVMH will also initiate exploration and, then, the development of its three coal
projects in Kalimantan, Indonesia. The first survey and exploration teams are
expected to begin work at the properties in the first quarter of 1997. NVMH will
also seek out a major coal marketing partner which may include end-users in the
Pacific Rim.
- - - FORESTRY & TIMBER
The Company's recently acquired forestry and timber concession near Belem,
Brazil is already in production. The Company anticipates completion of its
modifications to the existing saw mills by the early part of the first quarter
of 1997. The saw mills will cut and size raw trees for shipment to international
markets. Contracts and orders are already in place for shipments. Revenues from
production are expected to range from US$500 to US$900 per cubic meter.
Currently, monthly production is projected at 2,800 cubic meters of
semi-finished timber products per month, which will initially result in excess
of US$560,000 per month net cash flow to the Company. However, revenues will
increase substantially as NVMH's plans for additional saw mills are implemented.
- - - CORPORATE STAFFING & OTHER EXPERTISE
It is anticipated that corporate staffing will be steadily increased to manage
the wide range of issues associated with exploring, developing, and the mining
the portfolio of concessions which the Company has well established. As
appropriate, the Company
4
<PAGE> 10
will utilize outside consulting firms as well as independent consultants in
order to achieve to achieve the highest level of expertise and maximum
efficiency.
- - - FINANCING
Capitalization of the 1997 activities will be through a private placement of
US$3,000,000 followed later in 1997 or early 1998 with a secondary offering if
needed. However, the Company has other options to raise financing in joint
ventures which will not require the sale of equity as contemplated. The
Company's balance sheet gives it flexibility to raise money through debt
markets. The objective of the Company is to achieve a market capitalization of
US$500 million by the end of 1997. The Company also expects to be listed on the
NASDAQ "Small Cap" or NMS in early 1997.
III. RESOURCE DEVELOPMENT AND OPERATIONS STRATEGY
NVMH is in the unique position to take advantage of a growing trend among most
broad-based natural resources companies, which is to both increase its
investments in emerging markets as well as to further develop its operations in
markets such as North America. In 1997, the Company will initiate the
development of world-class gold and coal projects in Indonesia as well as
initiate the full production and expansion of its current capacity for its
forestry and timber projects in Brazil. In the United States, NVMH will enter
into full production of its gold mining projects in Nevada.
Foreign investments in mining and other natural resource projects in developing
countries are increasing due to support from the international lending
institutions (e.g., World Bank). For Indonesia, foreign investment in mining
projects is becoming an acceptable risk for several reasons: (1) improving
domestic economic conditions, (2) the government's willingness to develop
resources for income from foreign exchange, and (3) the arrival of a large
number of international mining companies whose confidence in the Indonesian
market outweighs their aversion to risk. In 1996, foreign investment in
Indonesia exceeded US$70 billion.
The Company founded a wholly owned subsidiary, Kalimantan Resources, in 1996 to
hold and develop its Indonesian assets. NVMH's joint venture partner in
Indonesia is Maxwells Energy & Metals Technology Ltd. (Maxwells). Maxwells is an
investment company which is primarily involved with the acquisition and
development of precious metals and minerals. In particular, Maxwells is actively
pursuing these business opportunities in Indonesia as well as other certain
Asian countries. Due to Maxwells' long-term presence in Indonesia, it has
fostered important relationships with influential local partners from which
Maxwells has been able to secure significant mining concessions.
In accordance with the joint venture agreement between NVMH and Maxwells, NVMH
issued 400,000 common shares of NVMH at signing of the agreement in 1996. NVMH
is further obligated to transfer an additional 4 million common shares to
Maxwells at such time that a valuation of properties secured and assigned to the
joint venture
5
<PAGE> 11
reaches a value in excess of US$12 million as determined by an independent
consulting firm.
NVMH entered the timber market through its 80% held subsidiary Equatorial
Resources. Equatorial was incorporated as a British Virgin Islands company in
1996 primarily for the purpose of acquiring and developing timber and other
natural resources in South and Central America. The remaining 20% of Equatorial
is held by the property's developer, Ignatius "Eddy" Theodorou, a Brazilian
timber and transportation executive.
- - - INDONESIA
Indonesia has a history of natural resource development which includes mining,
timber, and oil and gas. The explosion of gold mining development, particularly
in Kalimantan, has made the country one of the most sought-after locations for
land acquisition in the world. NVMH was selected to participate in this
remarkable opportunity because of its long history of participation in the
public mining equity markets and the diligence and persistence of its
management. The key to successful development in this new market is to first
secure marketable title and to obtain these concessions in those areas which
have high promise for exploration and discovery. NVMH's gold projects in
Kalimantan meet these criteria. As the part of the Company's effort to emerge
from a junior gold mining company into a broad-based natural resource company,
NVMH was quick to acquire three coal mining concessions when the opportunity
presented itself. The coal on these properties is of such quality, with low
sulfur content and high BTU, that it is acceptable in most countries whose air
quality regulations are strict.
Western Kalimantan Gold Project -- See Attachment C (Location Map)
The Western Kalimantan gold project is comprised of 62 hectares of land, and it
is the intent of the Company to expand to 2,000 hectares and beyond. At this
time, title to the property is held under the form of a "KP", which is a form of
local Indonesian ownership, and for which NVMH has acquired the rights to the
"KP" through its own local Indonesian nominee company known as PT Duta.
The geology at the Western Kalimantan gold project is characterized by two
general trends:
1. Red, green and black siltstones with quartz diorite intrusions of
late triassic to the west; and
2. Granodiorite quartz felspar porphyry of Miocene to the east.
Mapping indicates widespread zones of chlorite argillic and sericite, alteration
and strong leaching and oxidation of original sulfides. A long history of
alluvial operations in the area is a strong signature for the nearby mineralized
suspected lode deposits.
6
<PAGE> 12
For the initial field work, access to the property will be by road and motorized
canoe. Helicopters will be used for advanced exploration activities.
Infrastructure is very limited but because of the close proximity to the west
coast of Kalimantan as well as well as low relief terrain, no unusual
development problems will be encountered.
Initial sampling conducted by consultants for the Company indicates large
mineralized areas. Because of this prior work and advantageous logistics and
support, the Company has selected Western Kalimantan to be the first of its
recently acquired concessions in Indonesia to undergo more extensive
exploration. An airborne geophysical program, using both magnetic and
radiometric surveys will be conducted to identify mineralized areas not
associated with normal outcrops or alluvial activity. Following this survey and
additional ground geochemical sampling, key core drill targets will be
identified. Drilling will start as early as the second quarter of 1997.
Acquisitions of additional property at Western Kalimantan is an integral part of
the development program.
Sopang Gold Project -- See Attachment D (Location Map)
The Sopang Gold Project consists of 16,480 hectares of grass roots property.
Title and rights to develop this concession is also held under the "KP" form.
Sopang is located on the Kendilo River is southeast Kalimantan approximately 60
kilometers in land from the Celebes Sea at an elevation ranging from 420 meters
to 1,000 meters. The general coordinates are as follows:
1. 20 kilometers west of the village of Tanagrogot,
2. 10 kilometers west southwest of the village of Kauro,
3. 125 kilometers southwest of the coastal town of Balikpapan (with a
small airstrip), and
4. 210 kilometers northeast of the coastal town of Bandjermasin; the
nearest airstrip is 1,500 meters long.
The Sopang concession can periodically be reached by dirt road and/or motorized
canoe from Balikpapan and Tanagrogot; otherwise it can be reached by helicopter
from the airstrip at Bandjermasin. The general geology of the area is
characterized by tertiary sediments and volcanics associated with intrusive
structures with gold mineralization that is typical of East Kalimantan. Alluvial
operations are small but are prevalent in the area. These operations are, again,
signatures for nearby lode deposits.
Due to limited infrastructure in the area in and around Sopang, initial work
will be limited to surface trenching and geochemical sampling. Field work at
Sopang will be initiated in the first quarter of 1997 with more intensive
exploration, including airborne geophysical surveys and drilling, to be
initiated later in 1997.
7
<PAGE> 13
Cepa Coal Projects -- See Attachment E (Location Map)
The Cepa Coal Projects cover an area of approximately 286,000 hectares and are
divided into three independent properties, all of which are held under the
government format known as a Contract of Work ("COW") as opposed to a "KP." Each
of the properties are described as follows:
1. Property 1: 71,420 hectares
2. Property 2: 104,700 hectares
3. Property 3: 109,900 hectares
A major coal domain in Indonesia follows the coast from Bandjermasin on the
south side of the inland north to the Malaysian border. Two of the concessions
are located northwest of the village of Sangkulirang, and the third is located
to the north or Sangkulirang. All three are within 75 kilometers of the village
by motorized canoe. Sangkulirang is also accessible from either Balikpapan or
Samarinda. Each of the concessions range from 25 to 75 kilometers inland from
the eastern coast of Kalimantan. Coal seams in the area measure from 1 meter to
20 meters and dip at a shallow angle. Preliminary tests from outcropping samples
indicate calorific values ranging from 4,700 to 6,000 kilocalories per kilogram,
volatile matter from 31% to 41%, sulfur from 0.2% to 2.0%, and ash from 3% to
7%.
Most of the coal mines operating in Indonesia contain sub-bituminous to
bituminous coals similar to those found on the Cepa Properties as well as those
found at the PT Kaltima Prima Coal Property, which is one of the largest
producers of coal in Indonesia and lies to the south of the Cepa Properties.
Initial work on the properties will include reasonable expansion of rights to
include additional hectares containing similar high-grade coal. In the initial
phases of development, the Company will conduct surface sampling and shallow
drilling for characterization of coal, general market surveys, identification of
potential customers, and the development of a feasibility study consistent with
full development. Some of this work will be initiated in the first quarter of
1997 and will continue into 1998.
- - - BRAZIL
Timber Operations -- See Attachment F (Location Map)
NVMH's decision to enter the timber market was strengthened by the strong
performance of timber prices in 1996. With a price appreciation of 52% in 1996,
timber was at or near the top of all international commodity price increases for
the year.
Under the terms of a joint venture agreement with Jonasa Madeiras Corporation of
Brazil (the "Joint Venture Agreement"), Equatorial will control, develop and
operate
8
<PAGE> 14
276,000 hectares of virgin timberland located in the State of Para, Brazil. This
concession could be considered one of the largest hardwood timber holdings in
the world. The contract areas include a variety of timber species of which
initially only eighteen of the most commercial of the one hundred and
twenty-five available have been selected and factored in the operating forecast
shown below. The other species will be forested at the appropriate time.
Of the four existing saw mills acquired by Equatorial, two are operational in
Phase I and in Phase II, the other two mills will be put into operation by the
end of February 1997. Immediate expansion plans call for the construction of up
to eight additional mills in Phase III. The purpose of several small mills as
opposed to one large facility, is to accommodate different varieties of timber
and minimize downtime in the event of mechanical failure or scheduled
maintenance of any of the mills. All appropriate infrastructure including power,
housing, roads and auxiliary equipment as well as trained labor and strong
management are in place and more than adequate to accommodate the phased
increase in mill capacity.
All shipping and associated transportation services will be provided by the
Jonasa Group, the largest shipping company in the Amazon Basin. Their expertise
and political position provide invaluable support to the operation, and as a
participant in the joint venture, allow for operating efficiencies that greatly
enhance profitability. The joint venture also holds the lands in fee title and
the existing operations have virtually no debt.
Equatorial has standing orders for all of its initial start-up production in
Phase I and Phase II at 200 cubic meters per day capacity. Additional orders for
up to 1,000 cubic meters have been submitted to Equatorial and demonstrate the
viability of the immediate expansion noted above. That expansion will commence
in the first quarter 1997.
A full time manager of operations for the Brazilian timber operations, Mr.
Theodorou, mentioned above, is in place. With immediate production from the new
timber mill near Belem, the impact of significant cash flow from the timber
operations is anticipated in the first quarter of 1997.
ECONOMICS
Capital Requirements - US$500,000 is being provided for Phase I and Phase
II by NVMH. NVMH will also provide US$1,500,000 for the Phase III. These
funds will be provided through additional equity, production revenues or a
combination of both.
Gross Asset - 276,000 hectares. The United Nations Food and Agricultural
Organization (F.A.O.), Simons Corporation (Canada) and Reid, Collins &
Associates Ltd. (Canada), highly respected forestry experts, have
evaluated 24,000 hectares of the total holdings and confirm that each
hectare will yield approximately 200 cubic meters of raw timber.
Therefore, the total potential asset value of the 276,000 hectares would
be approximately 55.2 million cubic meters of raw, hard wood timber.
Factoring in cost and using a conservative
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profit figure of US$500 per cubic meter, the potential asset value can be
stated at US$27.6 billion. The US$500 profit estimate was derived from
consultation with established timber experts. Equatorial, under its joint
venture agreement with Jonasa, controls one hundred percent (100%) of the
timber asset and fifty percent of the profits. NVMH in turn, owns 80% of
Equatorial.
Joint Venture Structure - Within the total amount of the 276,000 hectares
of land controlled under the Joint Venture Agreement, 53,822 hectares were
purchased by the Jonasa Group in 1961. Thirty percent (30%) of this land,
16,146 hectares, was already cleared for livestock and agricultural
purposes at the time of purchase. The remaining 259,854 hectares are
virgin forest in which 178,000 hectares were purchased in 1987 with
another 44,178 purchased at approximately the same time.
In acquiring the timber property, the terms of the agreement with Mr.
Theodorou included the initial US$500,000 mentioned above for the mill
facility. Further, Mr. Theodorou will be granted 2 million common shares
of NVMH in 1997.
In order for the Joint Venture Agreement to be accurate in value in terms
of dollars and cubic meters, Equatorial and Jonasa guaranteed NVMH to
uphold their responsibilities by replacing the cut timber either through
purchase of other properties and by replacing the missing cubic meters by
purchasing timber from other approved sources as well as reforesting.
Cash Flow Projections - The following cash flow projections for Phase I
and Phase II are based on the production of 200 cubic meters per day
scheduled to commence in February 1997 with Phase I already operational.
The expansion plans for Phase III will increase the mill feed capacity to
1,000 cubic meters per day. The following computations are for Phase I (in
place) and Phase II (operational in February 1997):
200 cubic meters per day X 20 days per month (at two shifts per day)
= 4,000 cubic meters per month
4,000 cubic meters per month less 30% to sawn timber (conventional
method of calculating profits in the timber industry) = 2,800 cubic
meters per month
2,800 cubic meters per month X US$500 per cubic meter (net after
costs) = US$1,400,000 per month projected cash flow
US$1,400,000 with 50% or US$700,000 to Jonasa Group (as joint
venture share) and US$700,000 to Equatorial
US$700,000 X 80% to NVMH or US$560,000 per month
Equatorial received purchase order inquiries for up to 30,000 cubic meters
per month. Extrapolating from the current capacity in Phase I and Phase II
of 200 cubic meters per day to include the Phase III production of 1,000
cubic meters
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per day, the net cash flow of the joint venture potentially could grow to
exceed US$14,000,000 per month or US$5,600,000 to NVMH.
Environmental Conditions - Equatorial has contracted with Eco-Rating
International for the development of a balanced ecological operating
model. This study, estimated to cost $36,000, will be completed at the
time of initial production from the timber properties.
Management - Messrs. Theodorou, Christopher Michaels, C.E.O of NVMH,
Jeffrey Kramer, President of NVMH comprise the directorship and management
of Equatorial. Joaquim Luis Fonseca Neto is the president of Jonasa
Madeiras and Companhia Agropecuaria Rio Jabuti comprising the Jonasa
Group.
- - - UNITED STATES
Nevada Operations -- See Attachment C (Location Map)
NVMH's focus during 1996 was to initiate operations at the Manhattan Mine
Project in Nevada. Harrison Western, an internationally respected underground
mining contractor was employed by NVMH to be the on-site operator. Harrison
Western's work was initiated in July 1996 and included placement of mine shops
and support facilities; mining in the existing workings of the Manhattan
Consolidated Mine; and extension of the existing decline from its end location
of 1,200 linear feet from the surface to the White Caps 565' Level. Underground
flooding and caving of the existing decline required an alternate access way and
a new decline was driven starting from approximately 800 feet on the existing
decline. As of the end of December 1996, the new decline has been driven 350
feet with an additional 450 feet expected to be completed by the end of March
1997. At that time access to the White Caps 565 Level will be achieved. NVMH
will then install a new haulage shaft and alternate man-way to the surface in
and around the White Caps Mine. During the extension of the new decline, NVMH
will mine higher grade areas encountered. The Company also received permission
from the State of Nevada to mine surface ore from three newly developed open
pits.
As of December 31, 1996, NVMH has mined approximately 3,000 tons of underground
and surface ore averaging approximately 0.130 ounces of gold per ton. This ore
will be milled in the New Concept Mill in February 1997. As additional surface
and underground ores around the Manhattan Consolidated Mine are mined, they will
be milled in the New Concepts Mill. Expected tonnage during 1997 is expected to
be in excess of 23,500 tons. NVMH is preparing a full operational plan to be
submitted to the Nevada Environmental Protection Agency (NEPA) to include mining
of up to 600,000 tons. Submittal to NEPA and approval of this plan is expected
to be in the second quarter of 1997. Ongoing exploration is expected to expand
ore reserves in the immediate Manhattan Consolidated and White Caps areas as
well as identify further deep underground drilling targets.
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<PAGE> 17
IV. ORGANIZATION AND MANAGEMENT
NVMH holds the majority ownership in each of the projects in Indonesia, 100% of
the Manhattan Mine project in Nevada and 80% of Equatorial which in turn
participates as a 50% profits partner in the timber project in Brazil which it
controls. The timber project is held in Equatorial Resources, an 80% held
subsidiary of NVMH.
NVMH is expanding its organization to internally manage the various projects in
its portfolio while at the same time using international recognized consulting
and legal firms to provide special expertise, third-party opinions and general
support of the NVMH staff.
- - - MANAGEMENT
NVMH's management team includes a unique blend of financial and marketing
specialists, mining, timber and shipping executives and technical experts that
bring to NVMH more than 130 years of combined experience relative to the
development and operations now in place and contemplated in the future. This
existing staff provides invaluable expertise in dealing with the complex
financial, technical and societal aspects of its domestic and international
resource assets. A summary of the team experience follows:
Christopher Michaels - Chairman and Chief Executive Officer.
Mr. Michaels has thirty years experience in corporate capital formation
and corporate management. During his ten years with the Company, he has
been primarily responsible for increasing shareholder participation to its
current level and has directed the Company's commitment in international
projects including activities in Brazil and Indonesia.
Jeffrey S. Kramer - President, Chief Operating Officer and Chief Financial
Officer.
Mr. Kramer directs the day-to-day operations of NVMH. He is responsible
for institutional investors and provides coordination of the company's
regulatory and legal activities. For the last ten years Mr. Kramer had
devoted a major portion of his time in developing the Manhattan Mine
Project and positioning the Company for its recent rapid growth.
William R. Wilson - Vice President - Operations.
Mr. Wilson is the project manager for the Manhattan Mine project and
provides technical advisement for all of the Company's mining activities
and directs outside contractors. Mr. Wilson has thirty years international
mining experience including the management of mining divisions of three
public companies. He is a director of Banro Resource Corporation and more
recently managed the technical aspects of Banro's SAKIMA gold project in
Zaire. Mr. Wilson is also president of Gold King Mines Corporation,
managing that company's Gold King gold mine in Colorado and chairman of
Gold King Consolidated, Inc. a Dallas-based oil, gas and mining company.
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<PAGE> 18
Ignatius "Eddy" Theodorou - President - Equatorial Resources.
Mr. Theodorou has thirty years experience in shipping and timbering
operations. His expertise in the complexities of international timbering
operations has allowed NVMH to enter an extremely competitive industry
with a minimum of development and start-up time.
Stanley J. Mohr - Vice President of Shareholder Relations.
Mr. Mohr has been with NVMH since its formation in 1986 and provides
day-to-day contact with a large number of NVMH shareholders. Mr. Mohr also
provides general marketing consulting services to the Company.
William Michaels - Vice President of Investor Relations.
Mr. Michaels has been with NVMH since its formation in 1986. He assists
Mr. Mohr in day-to-day contact with NVMH shareholders and advises the
Company on shareholder investor related issues. Mr. Michaels is the father
of Christopher Michaels, the Company's Chairman and Chief Executive
Officer.
Arthur Mendenhall - Manager North American Exploration.
Mr. Mendenhall is responsible for all of the Company's exploration
activities in North America and is the Company's on-site representative
for the Manhattan Mine project maintaining grade control, developing
expanded reserves and providing guidance for expanded explorations
activities in Nevada and in other gold producing areas.
The NVMH Board of Directors provides the strategic direction for NVMH, as well
as opportunities based upon their personal contacts, valuable guidance,
organizational clarity and purpose based upon their experience. Expansion of the
Board is being considered to represent both ownership and technical interests.
Ms. Pollock and Dr. Rude', as members of the Board listed below, represent
outside shareholder interests on the Board.
The NVMH Directors include:
Christopher D. Michaels - Chairman
Jeffrey S. Kramer - Director
Stanley J. Mohr - Director
Edna Pollock - Director
Joe C. Rude' III, M.D. - Director
- - - TECHNICAL TEAM IN INDONESIA
The NVMH technical project development team in Indonesia is based in Jakarta and
has responsibility for the evaluation and development of the gold and coal
mining projects. The project development team will maintain very close
cooperation and coordination with Behre Dolbear and NVMH's management team in
the United States.
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<PAGE> 19
- - - TECHNICAL ADVISORS
NVMH has retained Behre Dolbear as its technical advisory firm to conduct
independent assessments and studies of the various projects in Indonesia. Behre
Dolbear, a New York based consulting firm, has additional offices in Denver,
Colorado, Sydney Australia, Santiago, Chile, and Toronto, Canada. Mr. Malcolm
Hancock is the official representative from Behre Dolbear and serves as the
firm's Managing Director of its office in Sydney, Australia. NVMH has also
retained two local consulting geological firms in Jakarta, P. T. Snowden and Dr.
Deddy and Associates, to provide local technical and logistical support. These
firms have provided on-site services from the initiation of activities in
Kalimantan. Their in-country expertise provides a major advantage in dealing
with local activities and logistical support.
- - - ACCOUNTANTS
NVMH's accountants and auditors are Jackson & Rhodes of Dallas, Texas. They
provide financial and auditing assistance.
- - - ADDITIONAL SERVICES
Although the management and staff of NVMH are very capable, a number of specific
and specialized skills must be contracted to ensure adequate planning,
organization, control, and leadership. Such services may include;
* accounting and auditing
* legal
* metallurgical
* geotechnical
* environmental and permitting
* feasibility investigations
* engineering design
Other services which might be required include:
* human resources
* temporary services
* management consultant
* logistic/expediting.
V. FINANCIAL STATEMENTS & FINANCIAL RISK PROTECTION
The audited financial statements for NVMH for the periods ending May 31, 1996,
August 31, 1996, and November 30, 1996 are shown in Attachment A.1
NVMH intends to secure project and political risk guarantees either from the
World Bank Group "Multilateral Investment Guarantee Agency" (MIGA) or the United
States
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<PAGE> 20
Overseas Private Investment Corporation. Both agencies typically will insure up
to 90% of the principal amount of a US$50 million investment.
WITH THE EXCEPTION OF HISTORICAL MATTERS, THE MATTERS DISCUSSED IN THIS
EXECUTIVE REPORT ARE FORWARD-LOOKING STATEMENTS THAT INVOLVE RISKS AND
UNCERTAINTIES THAT COULD CAUSE ACTUAL RESULTS TO DIFFER MATERIALLY FROM
PROJECTIONS OR ESTIMATES CONTAINED HEREIN. SUCH FORWARD-LOOKING STATEMENTS
INCLUDE STATEMENTS REGARDING PLANNED LEVELS OF EXPLORATION AND OTHER
EXPENDITURES. FACTORS THAT COULD CAUSE ACTUAL RESULTS TO DIFFER MATERIALLY
INCLUDE, AMONG OTHERS, DECISIONS AND ACTIVITIES OF OTHER PRIVATE PARTIES,
UNANTICIPATED GRADE, GEOLOGICAL, METALLURGICAL, PROCESSING OR OTHER PROBLEMS,
CONCLUSIONS OF FEASIBILITY STUDIES, CHANGES IN PROJECT PARAMETERS AS PLANS
CONTINUE TO BE REFINED, THE TIMING OF RECEIPT OF GOVERNMENTAL PERMITS, RESULTS
OF CURRENT OR PLANNED EXPLORATION ACTIVITIES, ENVIRONMENTAL COSTS AND RISKS, AND
CHANGES IN THE MARKET PRICES OF ITS PRODUCTS, AS WELL AS OTHER FACTORS DESCRIBED
ELSEWHERE IN THIS EXECUTIVE REPORT. MOST OF THESE FACTORS ARE BEYOND THE
COMPANY'S ABILITY TO PREDICT OR CONTROL. THE COMPANY DISCLAIMS ANY OBLIGATION TO
UPDATE ANY FORWARD-LOOKING STATEMENT MADE HEREIN. READERS ARE CAUTIONED NOT TO
PUT UNDUE RELIANCE ON FORWARD-LOOKING STATEMENTS.
2/03/97
<PAGE> 21
[REINSTEIN, PANTELL & CALKINS LETTERHEAD]
January 29, 1997
Jeffrey Kramer
Executive Vice President
NEVADA MANHATTAN MINING
5038 Parkway Calabasas
Suite 100
Calabasas, California 91302-1422
Dear Mr. Kramer:
In your letter to me dated January 29, 1997, you confirm that Nevada
Manhattan Mining has net tangible assets in excess of $2,000,000 as of November
30, 1996. Based on your representation that Nevada Manhattan Mining currently
has net tangible assets (i.e. total assets less intangible assets and
liabilities) in excess of $2,000,000, then the stock of Nevada Manhattan Mining
would not be defined as "penny stock" as defined in Rule 3a51-1(g) [17 C.F.R.
240.3a51-1(g)].
Very truly yours,
REINSTEIN, PANTELL & CALKINS
By: /s/ Lloyd S. Pantell
---------------------------
Lloyd S. Pantell
LSP/mg
